OPEC Production Up in May Despite Lower Iranian Output (USO)

June 8, 2012 3:03 PM EDT
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OPEC oil production in May rose 40k barrels per day, despite a decline of 30k in Iranian output, according to a survey by Platts. The May OPEC production levels were the highest since 2008, driven by a 150k increase in output from Saudi Arabia, Kuwait, and Libya, which offset declines from Angola, Iran, Iraq, Nigeria and the United Arab Emerates.

"The number that really matters is the jump from January to May this year, which shows that OPEC output rose from 30.87 million b/d in January to 31.75 million b/d last month," said John Kingston, Platts global director of news.

"This has occurred even as Iranian supplies were being squeezed by a drop in the number of customers willing to take its oil. We can now assume OPEC members at least will discuss at their upcoming meeting a possible paring of production. This scenario was almost impossible to fathom just a few months ago, as OPEC continues to surprise the world with its ability to put oil on to the market."

Pressure to rein in Saudi production could be seen at OPEC's upcoming June 14 meeting. Earlier this week, Algerian oil minister Youcef Yousfi said OPEC should cut production if it emerged that output was exceeding the official ceiling of 30 million b/d.

United States Oil (NYSE: USO), an ETF that tracks crude oil futures, is trading slightly higher in late trading on Friday, up 0.5 percent. USO is down 14 percent in the past 30 days.

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