Thursday, May 29, 2014

OPEC May Crude Output Advances From Three-Year Low in Survey

OPEC crude production climbed in May for the first time in three months, led by gains in Angola and Saudi Arabia, a Bloomberg survey showed.
Output from the 12-member Organization of Petroleum Exporting Countries rose by 75,000 barrels a day to an average 29.988 million, according to the survey of oil companies, producers and analysts. Last month’s total was revised 50,000 barrels a day higher to 29.913 million because of changes to the Saudi Arabian and United Arab Emirates estimates.
Members increased production as the International Energy Agency projected further increases will be needed to meet demand during the second half of the year. The IEA said in a May 15 report that OPEC will need to provide an average of 30.7 million barrels a day in the last six months of 2014.
“There’s still room for OPEC production to increase further,” said Sarah Emerson, managing principal of ESAI Energy Inc. in Wakefield, Massachusetts. “Both the IEA and OPEC said this month that there’s a need for additional barrels.”
Brent crude for July settlement advanced 16 cents to close at $109.97 a barrel today on the London-based ICE Futures Europe exchange. Brent is the benchmark grade for more than half the world’s oil. West Texas Intermediate crude for July delivery increased 86 cents, or 0.8 percent, to settle at $103.58 a barrel on the New York Mercantile Exchange.
Angolan output increased by 140,000 barrels a day to 1.68 million, the biggest gain for any member in May. Production climbed because of the end of maintenance at the Greater Plutonio offshore field operated by BP Plc.

Saudi Gain

Saudi Arabia, the group’s biggest producer, bolstered output by 70,000 barrels a day to 9.67 million, the first gain this year. The country pumped 10 million barrels a day in September, the most in monthly data going back to 1989. Local crude burning is ramped up as temperatures rose in the desert kingdom this month.
Iranian production declined 90,000 barrels a day to 2.75 million this month, the biggest decline in the survey. The nation pumped more than 3.1 million barrels a day from 1991 until July 2012, when additional sanctions were imposed on the Islamic republic. Iran, the group’s second-biggest producer in June 2012, is now in fourth place.
Nigeria’s production fell 70,000 barrels a day to 1.95 million in May, the second-biggest decrease in the survey. Royal Dutch Shell Plc lifted a force majeure on Forcados crude exports on May 15 after removal of theft points, according to e-mailed statement. Force majeure is a legal step that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.

Libyan Slump

Libyan output fell by 35,000 barrels a day to 180,000, the lowest level since September 2011. Production this month was down 87 percent from a year earlier. The North African country’s pumped 1.59 million in January 2011 before the uprising that led to former leader Muammar Qaddafi’s ouster and subsequent killing that year.
“If there is an improvement in Libya or Iran, everything changes for OPEC,” Emerson said. “Members will be looking to cut output, not increasing it, in the second half of the year.”
OPEC ministers kept their output target unchanged at 30 million barrels a day on Dec. 4. The group will next meet on June 11 in Vienna.
To contact the reporter on this story: Mark Shenk in New York at
To contact the editors responsible for this story: Dan Stets at Bill Banker

No comments:

Post a Comment