Published: Tue, June 12, 2018
Markets | By Otis Pena

Saudi tells OPEC it pumped more oil in May, still below quota


Saudi Arabia, which along with Russian Federation is trying to garner support for lifting output limits, told the Organisation of Petroleum Exporting Countries that its daily production rose 162,000 barrels a day to 10.030 million in May compared with the previous month, a person with knowledge of the data said, asking not to be identified because the information isn't public.

Various sources show that "considerable uncertainty as to world oil demand and non-OPEC supply prevails", OPEC said, leading to a wide range of estimates for the remainder of 2018.

But markets are anxious by falling supply from Venezuela and the potential of lower exports from Iran.

Non-OPEC suppliers include the United States where producers have returned to the business in droves, encouraged by rising prices.

"Non-OPEC supply is expected to rise sharply in 2019 led by U.S. shale growth, along with Russia, Brazil, Canada and Kazakhstan", U.S. bank JPMorgan said, adding that it was bearish for oil in the second half of this year.

"Early in the session, prices fell in response to a bearish report from JPMorgan on Friday that said, 'Non-OPEC supply is expected to rise sharply in 2019, led by USA shale growth, along with Russia, Brazil, Canada and Kazakhstan".

July WTI crude oil settled at $2.963, up 0.073 or +2.46% and August Brent crude oil settled at $76.40, down $0.06 or -0.08%.

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LONDON-OPEC pumped more oil last month driven by higher output from Saudi Arabia, the cartel's de facto leader, which has for more than a year led a coalition of big producers in curbing production.

OPEC and its partners are due to meet on June 22-23 in Vienna.

OPEC secretary general Mohammad Barkindo in April praised the agreement as a "great success".

That implies USA crude output, already at a record high of 10.8 million barrels per day (bpd), will rise further.

"Markets are braced for the most fractious conference as OPEC members look fundamentally divided", said Phillip Futures analyst Benjamin Lu. Traders aren't sure what to expect from the meeting.

OPEC will report May production figures in a monthly report on Tuesday.

Production fell in Nigeria, Libya and Venezuela, but increased in Saudi Arabia, Algeria and Iraq. Venezuelan production is falling because of sanctions, economic crisis and mismanagement, while Iran faces United States sanctions over its nuclear program that are likely to curb exports in the next few months.

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