OPEC holds production steady as ministers discuss next move

The Organization of Petroleum Exporting Countries pumped 31.9 MMbpd last month, unchanged from revised levels for April, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. April’s 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 later this year 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.

The steady production levels last month owed as much to luck as design, with seasonal increases in Saudi Arabia countering unplanned losses in Nigeria.

Saudi output, which typically soars in the summer to meet power demand for air conditioning, increased by about 110,000 bpd to just over 10 MMbpd. The kingdom’s production held just 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 bpd to 1.62 million.

Venezuela crisis

A slump also continued in Venezuela as an escalating economic crisis takes its toll on the country’s oil industry. It produced 1.44 MMbpd, which barring a temporary collapse in 2002 and 2003, is the lowest in decades.

The Latin American nation’s 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/bbl last month, a level that threatens to hurt global fuel demand and has drawn criticism of OPEC policy from U.S. President Donald Trump. It’s also sparked protests from Brazil to Siberia. Saudi Arabia has said OPEC is focused on allaying consumers’ anxieties.

Oil extended declines for a third day, dropping to below $76/bbl in London.

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 issued Sunday.

All the 24 nations in the alliance will gather in Vienna later this month.