Saudi Arabia exceeds OPEC oil limits
RIYADH, Saudi Arabia — Saudi Arabia told OPEC it pumped 10.07 million barrels of oil a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.
The world’s biggest oil exporter increased output from 9.88 million barrels a day in May, pumping about 12,000 barrels a day more than the limit of 10.058 million it accepted in an agreement among OPEC and other major suppliers including Russia. Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public.
Saudi Arabia usually increases production during summer months to meet demand for power for air conditioning, leaving less output for exports. Demand got an extra bump this year in June because of the fasting month of Ramadan, when millions of Muslims visit Saudi Arabia, according to Sadad al-Husseini, a former executive vice president at Saudi Arabian Oil Co., the nation’s main oil producer.
“An increase by this very marginal figure due to these circumstances is justifiable,” al-Husseini said. “Summer demand is high in June.”
The price of crude oil has declined 17 percent this year, entering a bear market in June. Oil experts are concerned that rising world supply will outweigh production cuts from the Organization of Petroleum Exporting Countries and allied producers that took effect in January.