OPEC points to 2017 oil surplus as Saudi output hits record

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LONDON: Top oil exporter Saudi Arabia boosted its oil output to a record high in July, it told OPEC, in a sign key members remain focused on market share rather than tackling a supply glut by curbing production.

The monthly report from the Organization of the Petroleum Exporting Countries also said output from the 14-member group hit a new high last month, indicating excess global supply may persist into next year.

Oil declined almost 15 percent in July on concern about a glut of crude and finished products that would delay a long-awaited rebalancing of the market. The drop in prices has prompted speculation OPEC may seek to revive a deal with outside producers to freeze output.

“Cheap crude has led refiners to produce more refined products worldwide, adding to the oversupplied market,” OPEC said in the report.

Saudi Arabia pumped 10.67 million barrels per day of crude in July, according to figures it provided to OPEC. That is up from 10.55 million bpd in June and above the previous record of 10.56 million bpd achieved in June 2015.

Saudi-based industry sources said in April output would rise to meet summer power demand, not to flood the market.

Other OPEC producers are also boosting supply, offsetting the impact of militant attacks in Nigeria and conflict in Libya. Based on figures OPEC collects from secondary sources, OPEC pumped 33.11 million bpd in July, up 46,000 bpd from June.

This is the highest since at least 2008, according to a Reuters review of past OPEC reports.

Iraq, the second-largest OPEC producer, also increased output in July, while No. 3 Iran managed only a small boost as the rapid uptick seen following the lifting of Western sanctions in January tails off for now.

OPEC expects demand for its crude in 2017 to average 33.01 million bpd, suggesting a supply surplus of 100,000 bpd if OPEC keeps output steady. Last month’s report pointed to a small deficit.

In the report, OPEC made no significant change to its global demand outlook.