OPEC crude production climbed for a second month in August as Saudi Arabia pumped oil at the fastest pace in at least 24 years, a Bloomberg survey showed.
Output by the 12-member Organization of Petroleum Exporting Countries increased 116,000 barrels, or 0.4%, to an average 31.04 million barrels a day this month from a revised 30.924 million in July, the survey of oil companies, producers and analysts showed.
Saudi output climbed 150,000 barrels to 9.95 million barrels a day in August, the sixth straight gain and the highest for OPEC’s biggest supplier in monthly data going back to 1989. It was the largest gain of any OPEC member this month.
“We could be looking at an historic bull trap,” said Sarah Emerson, managing principal of ESAI Energy Inc. in Wakefield, Massachusetts. “Market sentiment may turn bearish by October and November. The amount of oil the Saudis are pumping is impressive.”
Brent crude for October settlement dropped $1.45, or 1.2%, to $115.16 a barrel on the London-based ICE Futures Europe exchange. Brent is the benchmark for more than half the world’s oil. West Texas Intermediate oil for October delivery fell $1.30, or 1.2%, to settle at $108.80 on the New York Mercantile Exchange.
The July production total was revised higher by 262,000 barrels a day because of changes to estimates for Saudi Arabia, Qatar, Iraq and Ecuador.
The desert kingdom will probably keep crude production in September at similar levels to this month and July, according to a person with knowledge of Saudi oil policy, who asked not to be identified because the matter is confidential. Output won’t vary much unless market conditions change, the person said.
The United Arab Emirates increased output by 120,000 barrels to 2.92 million barrels a day, also the highest level since at least 1989, the survey showed. It was the second- biggest production increase.
Libyan output tumbled 225,000 barrels to 575,000 barrels a day this month, the survey showed. It was the fifth straight decline, sending production to the lowest level since October 2011. Two years after the war that swept the late Muammar Qaddafi from power, Libyan government efforts to revive the oil industry are being stymied by feuding militias and protests.
“It’s clear that the Saudis and Emiratis have deliberately raised production to make up for the massive shortfall from Libya,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York.