The UAE and Kuwait kept their oil production close to their Opec-decreed quotas in May but Saudi Arabia boosted supply by nearly 200,000 barrels per day (bpd), official figures showed yesterday.

Iran gave no data for its crude output in May but the Gulf country pumped more than 200,000 bpd above its quota in April.

Qatar, a small oil producer but a major gas power, appeared to be complying with its production quota.

Reporting its crude output to the Riyadh-based Joint Oil Data Initiative (Jodi), an energy forum grouping nearly 100 hydrocarbon producers and consumers, the UAE said it pumped about 2.235 million bpd in May.

The output is slightly higher than its production of 2.217 million bpd in April but close to its Opec-assigned quota of about 2.22 million bpd. Kuwait said it produced around 2.240 million bpd in May, slightly above its quota but lower than its output of 2.250 million bpd in April.

Saudi Arabia, which controls a quarter of the world's proven oil deposits, reported production of about 8.219 million bpd in May, nearly 200,000 bpd above its official quota and its output in April, when it stood at 8.038 million bpd.

The kingdom gave no reason for the increase in its May production but Saudi Arabia has traditionally played the role of a residual oil producer to keep crude prices at reasonable levels.

Industry sources, however, said the increase in May as not part of that role but could be a bid by Riyadh to take advantage of an improvement in prices to boost revenue and finance its record 2009 budget.

The figures showed Iran, the second largest producer in Opec, pumped 3.571 million bpd in April but there was no data for May. Iran is assigned a quota of 3.33 million bpd under Opec's agreement that was enforced on January 1.

Qatar said it pumped close to its quota of about 732,000 bpd in May, slightly lower than its April production of 737,000 bpd.

The output cuts by the Gulf's Opec members were in line with collective agreements by the oil group to trim production by up to 4.2 million bpd since September to prop up crude prices after their collapse in late 2008.

Although Opec has not fully complied with the agreed cuts, they had pushed crude prices above $70 in June, nearly double their level in early 2009. But prices have eased below $70 over the past few weeks.

Saudi Arabia, which pumps nearly 30 per cent of Opec's total oil supply, has shouldered the bulk of the reduction, with its output sliding by more than 1.4 million bpd since September, when it pumped 9.463 million bpd.

The UAE has trimmed supplies by more than 400,000 bpd since September while the cut by Kuwait stood at 600,000 bpd and that by Iran exceeded 400,000 bpd. Despite its relatively low output, Qatar reduced supplies by over 100,000 bpd.

As a whole, the five Gulf Opec oil producers have slashed their crude supplies by just below three million bpd since September, when their combined production stood at around 19.92 million bpd, Jodi figures showed.

Iraq boosted its production to 2.311 million bpd in May from 2.293 million bpd in April but the conflict-battered Arab nation has remained outside Opec's production quota system for many years. Lower oil prices have sharply hit the coffers of Opec members, depressing their income to around $230 billion (Dh843.6bn) in the first half of 2009 compared with more than $450bn in the first half of 2008, when prices averaged a record $95 a barrel.

Forecasts by the Energy Information Administration of the US Department of Energy showed the Cartel's earnings could dive to $545bn this year from a record $968bn in 2008.

But the agency expects the income to rebound to around $672bn in 2010, apparently expecting a recovery in demand and consequently in prices.

 

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