Saudi Arabia told OPEC it raised oil production to a record as the organization forecast stronger demand for its members’ crude in 2016.
The world’s biggest oil exporter pumped 10.564 million barrels a day in June, exceeding a previous record set in 1980, according to data the kingdom submitted to the Organization of Petroleum Exporting Countries, Bloomberg reported.
The group sees “a more balanced market” in 2016 as demand for its crude strengths and supply elsewhere falters.
OPEC said it expects expanding oil consumption to outpace diminished output growth from rival producers such as US shale drillers, whittling away a supply glut.
The strategy is taking time to have an impact, with crude prices remaining 46% below last year's levels and annual US production forecast to reach a 45-year high.
“Saudi Arabia is still pursuing a market-share strategy,” said Torbjoern Kjus, an analyst at DNB ASA in Oslo. “They need more oil domestically for air-conditioning in the summer, so they could choose to either produce more or reduce exports. Clearly, they choose to produce more.”
Brent crude futures fell 1.9% to $57.63 a barrel on the London-based ICE Futures Europe exchange, extending a 2.6% loss last week.
