(Bloomberg) -- OPEC's output fell for a seventh consecutive month as the group signaled it would keep supplies restrained at least until the end of the year.
Crude production in June dropped to 30 million barrels a day as U.S. sanctions further curtailed Iranian shipments and Saudi Arabia chose to pare back its output. The supply drop underscores the kingdom's determination to keep the oil market tight, having just secured an agreement with Russia to extend output cuts for as much as nine months.
June output was 130,000 barrels a day lower than May, bringing the total reduction since the group agreed a fresh round of output cuts last year to about 2.5 million barrels a day. Despite that significant curtailment -- a combination of voluntary cuts and involuntary supply disruptions -- crude has been languishing at about $65 a barrel in London due to fears that global demand is weakening.
Saudi production fell by 100,000 barrels a day to 9.73 million, according to a Bloomberg survey of officials, analysts and ship-tracking data. The kingdom has been the most enthusiastic participant in the Organization of Petroleum Exporting Countries‘ deal with non-members including Russia, a group known as OPEC+. On average, it cut output by 721,000 barrels a day in the first half compared with the October baseline -- more than double its pledged reduction.
Iran's output slipped by 100,000 barrels a day to 2.28 million, the survey showed. The U.S. has tightened sanctions on the Islamic Republic, deterring buyers of its crude and worsening military tensions in the Persian Gulf.
“Exports continued to drop, adding pressure on storage builds in the country and leading to additional shut-ins,” said Bjornar Tonhaugen, chief oil analyst at Rystad Energy A/S in Oslo.
Nigerian production rose by 30,000 barrels a day to 1.89 million, yet again exceeding its limit in the OPEC+ deal. The West African nation intends to ask fellow members for an increase in its output ceiling at the meeting in Vienna on Monday.
“Nigerian production recovered following pipeline outages at Forcados, Bonny Light and Amenam blends,” said Tonhaugen.
--With assistance from Lucia Kassai, Julian Lee, Verity Ratcliffe, John Deane and Elisha Bala-Gbogbo.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan
©2019 Bloomberg L.P.
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