OPEC output rises as Saudi hikes production in August

Saudi Arabia’s crude oil production rose by 118,000 barrels per day (bpd) to average 9.81 million barrels per day (mbd) in August, the Organization of Petroleum Exporting Countries (OPEC) said in its latest monthly oil market report on Wednesday, citing secondary sources.

The direct communication figures showed the Kingdom’s oil production grew by 209,000 bpd to 9.79 mbd last month, it noted.

Total OPEC-14 preliminary crude oil production averaged 29.74 mbd in August, rising 136,000 bpd over the previous month, driven by rise in Saudi Arabia, the UAE, Iraq and Nigeria.

Earlier on Monday, Saudi Energy Minister Prince Abdulaziz bin Salman said that the Kingdom  was keen on working with the Organization of the Petroleum Exporting Countries (OPEC) and other non-oil producers to ensure a balance in the global oil market.

Read: Prince Abdulaziz bin Salman appointed Saudi Minister of Energy

"We believe in consensus. We need to work together as nations. Being the world largest producer of oil doesn't make us different from the least producing nation. We all have equal values and all that matters is reaching a consensus," he said during a discussion at the World Energy Congress in Abu Dhabi.

In the latest report, OPEC revised lower the global oil demand growth by 0.08 mbd to 1.02 mbd, due to weaker-than-expected data in the first half of 2019 from various global demand centers and slower economic growth projections for the remainder of the year.

" Given expectations for global economic growth, world oil demand is forecast at around 1 mbd in 2019 and 2020. Nevertheless, this is expected to be outpaced by the strong growth in non-OPEC supply,” OPEC said, stressing the need for “shared responsibility of all producing countries to support oil market stability to avoid unwanted volatility and a potential relapse into market imbalance”.

In August, Brent dropped 7.3 percent month-on-month (MoM) to average $59.50 a barrel, while WTI fell 4.7 percent MoM to average $54.84 per barrel. 

Meanwhile, Goldman Sachs lowered its 2019 forecast oil demand growth to 1 mbd, from 1.1 mbd, citing falling demand from India, Japan, other non-OECD Asian regions, the Middle East and Latin America. However, it left its 2020 projection in demand growth unchanged at 1.4 mbd.

Brent was trading up 1.1 percent at $63.09/bbl, while WTI rose 1.3 percent to $58.16/bbl on Wednesday afternoon.  

Write to Parag Deulgaonkar at parag.d@argaamplus.com