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Survey: OPEC Oil Output Falls in May from near Record High amid Attacks, Shortages

May 31, 2016 at 19:04 by Andrew Moran

Oil output from the Organization of the Petroleum Exporting Countries (OPEC) declined in May from close to a record high, according to a new survey from Reuters released on Tuesday. The decrease in oil output stems from militant attacks against Nigeria’s oil industry and outages seen across the Middle East.

OPEC’s oil supplies dipped to 32.52 million barrels per day in May, down from April’s 32.65 million barrels per day. The largest declines were seen in Nigeria, where oil production is in a free fall due to weekly attacks by Niger Delta militants. Nigeria’s oil output is at its lowest level in nearly 20 years with a little more than one million barrels of oil per day.

Although security forces have been making gains, militants have pledged that attacks will not subside.

Since 2014, OPEC has significantly increased its oil output, which has been led by the Saudi Arabian government. OPEC initially planned to cut supplies to prop up oil prices, but it changed course. Although it wants to expand production, there are reports suggesting some producers are having a difficult time in maintaining current supply levels.

OPEC officials are scheduled to meet in Vienna on Thursday. On the agenda is Saudi Arabia’s boost in oil supplies, Iran trying to gain market share, and regional oil disruptions. Also, OPEC leaders will talk about the United Arab Emirates (UAE)’s projection of oil heading to $60 a barrel by the end of 2016.

Ahead of the meeting, Iraq confirmed on Tuesday that it will export an additional five million barrels of crude oil in June. This comes one week after Kuwait said it plans to invest $42 billion to ramp up oil production, expand its refineries and produce a clean energy initiative by 2020.

The various outages in Alberta, Libya, Nigeria, and Venezuela have helped oil prices recover from its February lows. Oil recently topped $50 a barrel. At 18:47 GMT, WTI Crude Oil fell 0.81%, or $0.40, at $48.93 a barrel.

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