Brent futures slip as Saudi Arabia raises oil production
Updated : 17:42
Crude oil futures slipped again after the world's largest oil producer said it had increased output.
Saudi Arabia notified the Organisation of Petroleum Exporting Countries it hiked its output by 263,300 barrels a day last month to 10.011m a day, reversing roughly a third of the reductions it undertook in January.
The Middle Eastern Kingdom's output continued nevertheless below the 10.058m it was bound to under a November deal with other producers to slash their combined levels of production.
Until now, the Kingdom had been shouldering more of the more burden that agreed to in a bid to offset slippage from others.
Those new estimates were contained in OPEC's latest Monthly Oil Market Report.
As of 1535 GMT front month Brent crude oil futures were off by 0.84% to $50.93 a barrel on the ICE, alongside a 1.43% drop for the West Texas Intermediate contract to $47.72 a barrel.
In the same report, the cartel reiterated a forecast for oil supplies from outside its ranks to fall by 660,000 barrels a day in 2017 to 57.34m b/d.
Total demand on the other hand was now seen growing by 1.26m b/d this year, 70,000 b/d more than OPEC projected in its previous MMOR, to reach an average of 96.31m b/d.
During the previous week, Saudi energy minister Khalid Al-Falih went on record saying the Kingdom would not "bear the burden of free riders".
The Russian Federation, Iraq and the United Arab Emirates had yet to deliver all the curbs promised.
On Monday, Iraq oil minister Jabbar Ali al-Luiebi said his country was planning to shatter the record-setting benchmarks hit in 2016, with oil output seen climbing to 5.0m barrels a day, the Iraq Oil Report said.
However, according to secondary sources cited by OPEC in the MMOR the cartel's output of oil declined by 139,500 barrels a day in February to reach 31.958m, while Saudi's production fell 68,100 to 9.797m.
Those estimates from secondary sources were generally considered more accurate, according to Tom Plough, commodities economist at Capital Economics, although other analysts voiced disagreement.
"The renewed weakness in oil prices is likely to put more pressure on OPEC members to agree to extend the output cuts beyond June. Indeed, we think it is now more likely than not that there will be some sort of extension to the deal to ensure that stocks are drawn down to more normal levels," Plough added.
No equivalent data for total OPEC production from internal sources in February was available, due to a lack of figures for Gabon, Iran and Libya.
Based on data directly communicated by Saudi to OPEC, its production ran at an average rate of 10.651m b/d in the third quarter of 2016, 10.465m in December and 9.748m in January.
If one plugged in Saudi's self-reported figure for production into those provided from secondary sources then OPEC's total output stood at roughly 32.16m b/d last month.