Saudi Ara­bia ex­ceeds OPEC oil lim­its

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

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.

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