Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 29.45 million barrels per day (bpd) this month, up from a revised 29.1 million bpd in May, the survey of oil companies, OPEC officials and analysts found.
The extra supply from the Gulf OPEC members will be welcomed by consumer nations concerned about the impact of oil prices at well above $ 100 a barrel on economic growth and inflation.
But output may be lower than expectations.
Industry sources said earlier in June that Saudi Arabia would boost production to almost 10 million bpd this month, but analysts said there was no sign yet of that much demand in the market.
“I have seen no evidence that Saudi customers have requested that much extra oil and I don’t believe they will produce to simply fill oil tankers,” said Paul Tossetti, senior energy adviser at PFC Energy.
“Nevertheless, the Saudis are serious about plugging the gap in third-quarter crude supply to meet higher refining runs.”
Output is rising from the Gulf OPEC members following the group’s failed meeting on June 8, when seven members of the 12-nation OPEC blocked a Saudi-led proposal to increase its output targets.
OPEC has yet to boost output to the levels required to meet rising demand later this year. According to a Reuters poll last week, OPEC needs to add 1.43 million bpd in the second half to balance the market.
Supply is still lower than before the Libyan crisis reduced output from what used to be Africa’s third-largest producer. OPEC in January pumped 29.63 million bpd, the most since December 2008, according to Reuters estimates.
The International Energy Agency last week ordered the release of oil from emergency stocks for only the third time in its 37-year history after OPEC failed to agree an output increase to offset lost Libyan oil.
IEA Executive Director Nobuo Tanaka said this week the move, which OPEC has criticized, was only a temporary measure until extra Saudi Arabia output emerged.
The biggest change in June has come from Saudi Arabia, which has raised supplies by 450,000 bpd due to higher exports and increased demand from domestic power plants, the survey found.
Saudi Arabian Oil Minister Ali Al-Naimi said shortly after the June 8 meeting Riyadh was ready to supply the market with whatever oil it needed, despite the lack of an OPEC agreement.
Gulf producers the UAE and Kuwait have boosted supplies by a combined 150,000 bpd.
Lower output from several OPEC members countered the increases in the Gulf. Supply in Nigeria, whose production has surprised to the upside for much of this year, fell slightly to 2.2 million bpd.
Angola’s exports were expected to average 1.40 million bpd in June, the lowest monthly total since 2006, as field maintenance, technical problems and declining output at some of the country’s older fields curb supplies.
Venezuelan output fell slightly from upwardly revised May supply. Exports from Iraq edged lower due to slightly reduced shipments from both its northern and southern terminals.
Libya’s production posted a further decline of 50,000 bpd to 150,000 bpd. Output was running at almost 1.6 million bpd in January before the conflict.
OPEC has not officially changed its output policy since cutting output by a record 4.2 million bpd in December 2008 to 24.84 million bpd for 11 members, all except Iraq.
Since the June 8 meeting, OPEC officials have acknowledged the target is no longer valid as actual supply is so much higher.
OPEC does not provide timely official production figures so the oil industry relies on outside supply estimates from news agencies, consulting firms and government organizations.
