The world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia. Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public, Bloomberg reported.
Crude has declined 18 percent this year, entering a bear market in June amid concerns that rising world supply will outweigh production cuts from the Organization of Petroleum Exporting Countries and allied producers that took effect in January. The producers decided in May to extend their curbs through March 2018, as the oil market had yet to stabilize. Benchmark Brent crude was 52 cents lower at $46.36 a barrel in London at 12:15 p.m. local time.
OPEC needs to “shock and awe” the oil market with deeper cuts for prices to gain, Goldman Sachs Group Inc. said in a July 10 report. Without such action, and no evidence of sustained declines in inventories as well as U.S. drilling activity, prices could slump below $40 a barrel, analysts including Damien Courvalin and Jeffrey Currie wrote in the note.