Oil output increases to bring prices down

OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained high production rates despite a drop in prices and Iranian shipments did not fall substantially further ahead of an EU embargo.

Supply from the 12-member Organisation of the Petroleum Exporting Countries has averaged 31.80 million barrels per day (bpd), up from 31.75 million bpd in April, a survey of sources at oil companies, OPEC officials and analysts found.

OPEC’s total is the highest since September 2008, shortly before it agreed to a series of supply curbs to combat recession and collapsing demand, based on Reuters surveys.

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Oil prices surged in March to $128 a barrel, the highest since 2008, because of concern about disruption to global supply from US and European sanctions aimed at hurting Iran’s crude export revenues. Prices have since fallen back and Brent crude was trading just below $107 on Monday.

Top world exporter Saudi Arabia has pumped an extra 100,000 bpd this month, the survey found, taking output to 10.10 million bpd, the highest in decades.

Riyadh has made clear it would like oil prices to come down and says it would like to see Brent at around $100 a barrel.

Extra supply is also coming from Nigeria in May, where supply is rising due to rising production at a new Total field, Usan.

Iranian oil exports have not dropped further in May after falling sharply since March because core customers in Europe and Asia continue to buy ahead of European sanctions aimed at slowing Tehran’s nuclear programme.