Saudis' biggest oil surge in five years barely steadies OPEC output

By Grant Smith on 7/2/2018

LONDON (Bloomberg) -- Saudi Arabia’s biggest oil-production surge in five years was only enough to keep OPEC’s output steady last month, as losses elsewhere in the group piled up.

The kingdom is delivering on its promise to try and tame crude prices, boosting output by 330,000 bpd in June to 10.3 MMbpd, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. That’s the biggest monthly jump in production since July 2013.

But disruptions in Libya, coupled with ongoing supply losses in Venezuela and Angola, meant overall output from the Organization of Petroleum Exporting Countries rose only 30,000 bpd to 31.83 MMbpd.

With oil prices at their highest in more than three years, Saudi Arabia -- OPEC’s biggest member -- is under intense political pressure from U.S. President Donald Trump to cool the rally and ease the strain on the global economy. That pressure is set to grow as Trump hits the Saudis’ political nemesis, Iran, with sanctions and urges the kingdom to fill the gap.

The survey shows the scale of the challenge the Saudis face. Even before sanctions make a dent in Iranian exports, losses are accumulating in OPEC’s other troubled members.

Venezuela’s output has sunk to the lowest in decades as a spiraling economic crisis engulfs the country’s oil infrastructure. In Libya, renewed political clashes have led to control of oil ports passing to a faction that opposes the state oil company.

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