Saudi Arabia increases oil production
Top oil exporter Saudi Arabia has boosted supply to help meet the world’s need for fuel and may further increase output later if needed, a senior Gulf Opec source said yesterday.
Opec’s 13 members, especially core Gulf producers, are taking their output cues from global oil demand rather than sticking to production targets, said the source familiar with Saudi thinking.
“Whenever there is demand it will be met by Opec,” he said. “The majority of Opec producers definitely don’t like this high oil price because it is neither in their interest nor in the interest of the global economy, and it’s especially painful for the developing world.”
US crude hit a record above $135 a barrel last week, prompting consumer countries such as the United States to renew their plea for more oil from the Organisation of the Petroleum Exporting Countries.
Opec’s leading producer Saudi Arabia has been adjusting supply to match demand since August last year when prices were around $60 and it was pumping around half a million barrels per day (bpd) less than now.
Saudi Oil Minister Ali Al Nuaimi said earlier this month output would rise by 300,000bpd and hit 9.45 million bpd in June. Riyadh is pumping about 9.1 million bpd this month, the source said.
Global demand is likely to increase this year by about one million bpd, with demand picking up in the third quarter, the senior Gulf Opec source said, which explains the current Saudi production increase.
Last September Opec agreed a 500,000bpd increase in its formal output targets, with Saudi Arabia providing the greatest share. The group holds its next official conference on Sept. 9 in Vienna.
Most Opec members would like to see lower prices, but there was little they could do as the market was responding to factors beyond supply and demand, the source said.
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