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Workers are doing exercises at the Saudi Aramco oil complex in Shaybah, Saudi Arabia.
Reza | Getty Images
OPEC oil production continued to fall in May, reaching its lowest level in five years, the group warning that trade tensions between the US and China could lead to a slowdown in economic growth and a low fuel demand.
Producer club production from 14 countries fell 236,000 barrels a day last month to 29.88 million bpd, according to independent sources cited by OPEC in its monthly report. It was the first time that OPEC had pumped less than 30 million bpd since June 2014.
The decline in production comes as OPEC plans to extend a six-month contract to suppress production. In the monthly report, OPEC said it would carefully consider the economic outlook when meeting with Russia and other oil-exporting countries in the coming weeks.
"Throughout the first half of this year, current global trade tensions intensified, threatening to expand, and geopolitical risks remained in many key regions," said OPEC. "This has led to a slowdown in global economic activity and weaker growth in global oil demand compared to the previous year."
OPEC expects the global economy to remain under pressure in the second half of 2019, mainly due to trade disputes, which cast uncertainty over oil demand.
The group is now expecting world oil demand to grow by 1.14 million bpd in 2019, which is slightly lower than its latest forecast. At the same time, OPEC expects producers outside the group to increase their production by 2.14 million bpd this year, which means that supply growth will absorb the increase in demand.
Concern over the slowing demand pushed down oil prices to five-month lows, but crude futures prices rose about 3 percent on Thursday as a result of the slowdown in oil prices. # 39; reports of tanker attacks in the Gulf of Oman.
Production cuts and supply disruptions at OPEC continue to support the market. Together with Russia and other producers, OPEC is trying to keep 1.2 million bpd from the market.
In May, production in Saudi Arabia, the leading producer of OPEC, fell from 76,000 b / d to 9.69 million b / d. The kingdom continues to voluntarily pump well below its quota of 10.31 million bpd.
Oil supplies also continued to decline in Iran and Venezuela, two countries that have been targeted by US energy sanctions. In Iran, production fell by 227,000 b / d to 2.37 million bpd, while Venezuela's production fell by 35,000 bpd to 741,000 bpd.
Nigeria, the largest producer in Africa, also saw production drop by 92,000 b / d to 1.73 million b / d.
The losses were slightly offset by increases in production in Iraq and Angola.
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