Saudi Arabia Is Probably Producing More Oil, IEA’s Fyfe Says

Saudi Arabia, the world’s largest oil exporter, is probably boosting its output of the commodity, according to the International Energy Agency.

“There are indications that Saudi production is increasing,” David Fyfe, head of the IEA’s oil industry and markets division, told reporters in Washington today. “At the same time, it takes time for that oil to get to the market, and Saudi domestic crude utilization will probably also be increasing in June and July.”

The Paris-based agency, a policy adviser to 28 industrialized nations, including the U.S., Japan and Germany, is monitoring oil markets to determine whether members need to release reserves and cover the gap between commodity supply and demand, Fyfe said.

Saudi Arabia, together with Kuwait, Qatar and the United Arab Emirates, were ready to supply more oil to the market, Saudi Oil Minister Ali Al-Naimi said after the June 8 meeting of the Organization of Petroleum Exporting Countries in Vienna. OPEC failed to reach an agreement on production targets during that meeting.

Oil for July delivery rose 14 cents to expire at $93.40 a barrel at the close of floor trading on the New York Mercantile Exchange. Futures have advanced 20 percent in the past year. The more actively traded August futures gained 54 cents to settle at $94.17 a barrel.

Saudi Arabia burns petroleum during the hottest part of the year to generate electricity for its own population, boosting domestic consumption in the summer months.

Bloomberg