Reuters reported that top oil exporter Saudi Arabia pumped 9.8 million barrels per day of crude oil in July cutting output by 300,000 barrels per day from June.

An industry source said that the Opec heavyweight supplied 9.7 million bpd to the market in July while 100,000 million barrels per day of the output was sent to storage.

Internal demand for Saudi crude rises sharply in the hot summer months from June to August. Saudi oil production climbed to 10.1 million barrels per day in April, its highest for more than 30 years at a time when supplies from Iran have been falling due to a European Union oil embargo that took effect on July 1st 2012. After a brief fall in May, Saudi production bounced back to 10.1 million barrels per day in June.

Opec ministers at a meeting in mid June said that they would adhere to a collective production limit of 30 million barrels per day implying a 1.6 million barrels per day cut from actual supply of 31.5 million and Saudi Arabia was expected to make a sizeable contribution to that cut.

The 12 member Opec group's collective output fell further from its highest in four years in July as Iran's supplies fell to the lowest in more than two decades due to Western sanctions. Crude prices fell below USD 90 per barrel in June, as Saudi Arabia kept its output at multi decade highs and also due to gloomy economic outlook.

But Brent has bounced above USD 110 per barrel since then. On Thursday it traded just below USD 112 per barrel on hopes that China will roll out more stimulus measures to boost its slowing economy and fuel demand within the world's second-largest oil consumer.

Source - Reuters

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