Saudi Arabia ups oil output to 8.89m bpd

Saudi Arabia, the world's largest crude exporter, produced 8.89 million barrels a day of oil in May, up 0.8 per cent from April, amid reduced demand from Asia, figures from the Joint Organisation Data Initiative showed. The kingdom exported 6.84 million barrels a day in May, an increase of 1.2 per cent from the previous month, according to figures posted yesterday on the data initiative's website. The statistics for Saudi crude oil output include high-value condensates but exclude natural gas liquids, the website said. "The slight increase in both production and exports doesn't surprise me, as global oil markets were well supplied in May," John Sfakianakis, the chief economist at Riyadh-based Banque Saudi Fransi, said in a telephone interview. "If Saudi Arabia needs to keep production at a high level this summer, it will be due to higher local consumption and not higher global demand." The joint initiative is supervised by the Riyadh-based International Energy Forum, a group of 86 countries, and compiles data supplied directly by member governments. Its figures for Saudi production in May and April are smaller than those that Opec disclosed on July 12 in the producer group's latest monthly oil-market report. The Organisation of Petroleum Exporting Countries said Saudi Arabia, its biggest producer, pumped 8.96 million barrels a day in May and 8.78 million barrels a day in April. Opec's report cites secondary sources, such as analysts and news agencies, for its information, whereas the Joint Organisation Data Initiative, or JODI, relies on primary sources. Saudi Arabia proposed at Opec's most recent meeting on June 8 that the group boost its production target by 1.5 million barrels a day. Opec's 12 members could not agree, with Libya, Angola, Ecuador, Algeria, Iran and Venezuela all opposing the Saudi plan, Saudi Arabian oil minister Ali al-Naimi said at the time. He pledged that his country would help keep markets well supplied independently of Opec. "Contrary to the belief of many analysts that Saudi Arabia had to increase output to a record level, the data show that the markets may not need all this crude at the moment," Sfakianakis said. Japan, South Korea, and India all reduced crude imports in May, according to JODI data. Japan and South Korea, together with China, are Saudi Arabia's biggest customers in Asia. Japan and South Korea each cut May imports by 13 per cent, the data showed. China did not submit May information to JODI. Saudi Arabia had ample stockpiles of crude at the beginning of May, and this was a contributing factor in its decision not to increase output more steeply, Sfakianakis said. Saudi inventories dropped to 238.6 million barrels, down 7.5 per cent from April, reaching their lowest level in 15 months, according to JODI data. From / Gulf News