Saudi Arabia reduced oil production in July

LONDON (Bloomberg) -- Saudi Arabia, which recently pledged oil-supply increases to tame rallying crude prices, cut production last month, according to OPEC delegates familiar with the matter.

The biggest member of the Organization of Petroleum Exporting Countries pumped 10.3 MMbpd in July, according to the delegates, who asked not to be identified because the data is private. The kingdom told the cartel it produced 10.489 MMbpd in June.

The cutback comes despite promises from Saudi Energy Minister Khalid al-Falih that key OPEC members and their allies would add about 1 MMbpd of supply, doing “whatever is necessary to keep the market in balance.” Under pressure from U.S. President Donald Trump to reassure markets, the kingdom was said to have been preparing to pump 10.8 MM or 11 MMbpd.

The lower number follows signs that the Saudis couldn’t ultimately find buyers to justify pumping at record output levels. U.S. crude futures lost more than 7% in July, their steepest drop in two years, amid signs that a surplus is re-emerging in some parts of the world market. There are growing fears that the trade war between the U.S. and China could impair demand.

Prices slumped after the Saudi output levels were reported, trading 1.4% lower at $68.04/bbl.