The Organization of Petroleum Exporting Countries (OPEC) increased and pumped 31.9 million barrels per day in May, unchanged from revised levels for April as survey of analysts revealed. It was also disclosed that output was the lowest in a year.
OPEC and its allies are discussing whether to revive output after supply curbs they agreed to in late 2016 succeeded in clearing a global oil glut and prices rose to a three-year high. Saudi Arabia and Russia, the biggest two producers in the accord, have signaled that more oil will flow in 2018 to make up for potential declines in Iran and Venezuela. Still, they will have to convince others in a 24-nation alliance, some of whom prefer the higher prices.
Saudi output, which typically soars in the summer to meet power demand for air conditioning, increased by about 110,000 barrels a day to just over 10 million barrels a day. The kingdom’s production held above 10 million for most of last summer.
Production in Nigeria slumped to the lowest in more than a year following disruptions at key pipelines. Supplies fell 190,000 barrels a day to 1.62 million.
A slump was also experienced in Venezuela as an escalating economic crisis takes its toll on the country’s oil industry. It produced 1.44 million barrels a day, which barring a temporary collapse in 2002 and 2003, is the lowest in decades. The South American country unraveling has played a large part in eliminating the oil surplus OPEC set out to clear, and it’s part of the reason why the group is now deliberating whether to relax its supply curbs.
Prices of Brent crude, the global benchmark, hit $80 a barrel in May, a level that threatens to hurt global fuel demand and has drawn criticism of OPEC policy from U.S. It’s also sparked protests from Brazil to Siberia. Saudi Arabia has said OPEC is focused on allaying consumers’ anxieties.
Ministers from some key OPEC countries involved in the supply-curb accord met in Kuwait on June 2, where they emphasized the need for healthy market conditions and stable oil supplies, according to a statement from the Cartel.
However, the twenty-four countries in the alliance will gather in Vienna later in June to deliberate on significant issues relating to crude oil production among others.