OPEC April crude output decreases
OPEC crude production dropped to the lowest level in almost three years in April, led by declines in Saudi Arabian and Iraqi output, a Bloomberg survey showed.
Production by the 12-member Organization of Petroleum Exporting Countries slipped by 302,000 barrels a day to an average 29.863 million, the lowest level since June 2011, according to the survey of oil companies, producers and analysts. Last month's total was revised 128,000 barrels a day lower to 30.165 million because of changes to the Saudi Arabian, Iranian and Ecuadorean estimates.
Members of the group have had to reduce production because of unplanned and planned maintenance to pipelines, fields and refineries. OPEC is also seeing demand for its crudes drop as U.S. output surges.
Brent crude for May settlement slipped 91 cents, or 0.8 percent,
to close at $108.07 a barrel on the London-based ICE Futures Europe
exchange. Brent is the benchmark grade for more than half the
world's oil. West Texas Intermediate oil for May delivery fell
$1.54, or 1.5 percent, to settle at $99.74 a barrel on the New York
Mercantile Exchange. It was the lowest close since April 2.
"Brent has to stay above $100 a barrel to support the economies of
the Middle East," said Adam Wise, who helps run a $6 billion oil
and gas bond portfolio as a managing director at Manulife Asset
Management in Boston. "We're in the midst of a transformation of
the U.S. oil industry and Middle East countries are pondering how
to respond. The Saudis could be reducing production to keep prices
resilient."
U.S. crude output rose to 8.36 million barrels a day in the week
ended April 18, the most since 1988, Energy Information
Administration data shows. Production fell to 8.35 million last
week. Stockpiles climbed to 399.4 million barrels last week, the
highest since the EIA began reporting weekly data in 1982 and
supplies in the Gulf Coast, known as PADD 3, rose to the highest
level since the government data for the region started in 1990.
Saudi Arabia, OPEC's biggest producer, reduced output by 100,000
barrels a day to 9.5 million, the least since June. The desert
kingdom pumped 10 million barrels a day in September, the most in
monthly data going back to 1989.
The country decreased production because of less demand for domestic power generation and refineries. Saudi Arabian Oil Co. halted operations at the Riyadh oil refinery on April 15 for maintenance and will be idled for 45 days, Aramco said in an e- mailed statement. The plant can process 124,000 barrels of crude a day, according to the company website.
Iranian production slipped 25,000 barrels a day to 2.84 million
in April, according to the survey. The country pumped 2.865 million
barrels a day in March, the highest level since July 2012, when new
sanctions were imposed on the Islamic republic. Iran, the group's
second-biggest producer in June 2012, is now in fourth place.
Sanctions aimed at stopping Iran's nuclear program have hindered
the Islamic republic's ability to export crude oil. The U.S. and
its allies agreed on Nov. 24 to temporarily ease some of the
restraints. Iran started curbing its nuclear activities on Jan. 20
in line with the interim accord.
OPEC ministers kept their output target unchanged at 30 million
barrels a day on Dec. 4. The group will next meet on June 11 at its
headquarters in Vienna.