Output from the Organization of the Petroleum Exporting Countries climbed to 32.12 million barrels per day in May from 31.71 million bpd in April, according to the survey of oil firms, OPEC officials and analysts.
The supply boost came during a month in which oil soared to a record high above $ 135 a barrel and brings output back to OPEC’s target rate. But analysts said the extra barrels will barely offset flagging supply outside the group. “The increase in OPEC crude supply at this period of the year is unsurprising. It simply meets seasonally rising demand for crude as refiners emerge from maintenance,” said Harry Tchlinguirian at BNP Paribas.
“But the increase in OPEC crude output is not that significant given the global supply context, notably in view of non-OPEC crude supply contracting year-on-year in the first half of 2008.”
Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries, pumped 9.25 million bpd in May, up 200,000 bpd from April, according to the survey.
Under pressure from consuming nations concerned by oil’s rally, the kingdom said it boosted output by 300,000 bpd from May 10 to compensate for lower supply from other producers.
Iraq pumped 2.44 million bpd, up 140,000 bpd, due to rising shipments from the south. Improved security has allowed Iraq to boost exports of Kirkuk crude from the north since last year.
Exports reached 1.99 million bpd in May, the highest rate since the U.S.-led invasion of Iraq in March 2003, according to shipping data tracked by Reuters.
OPEC pumps about two in every five barrels of oil. Nigerian supply rose by 50,000 bpd due to the end of a strike in April that shut output at Exxon Mobil’s local unit.
But disruption at Royal Dutch Shell facilities meant the recovery was limited. Some participants in the survey estimated Nigerian output in May was lower than in April.
Shell said on May 26 it had been forced to shut in some production in Nigeria after militants attacked a major oil pipeline, the Nembe Creek trunkline, in the Niger Delta.
Exports from Iran dropped about 200,000 bpd in April and May from the first quarter’s average of 2.45 million bpd due to lower demand from refiners, a top Iranian oil official, Hojjatollah Ghanimifard, said on May 29.
Iran has been storing unsold crude oil at sea on tankers. Refiners should begin to resume full operations in June, pushing up demand, Ghanimifard said.
OPEC has kept official supply limits unchanged at meetings this year, saying consumers are well supplied and has blamed factors beyond demand and supply for oil’s rally, such as the weakening US dollar.
