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OPEC keeps pumping as oil demand softens

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(Globalpost/GlobalPost)

OPEC continues to pump more oil despite sluggish economic growth dampening an increase in demand, the International Energy Agency said on Wednesday.

The IEA, which advises oil consuming nations, said OPEC crude oil supply rose by about 135,000 barrels in May to the highest level for seven months at 30.89 million barrels per day (mbd).

At the same time, the IEA revised down its forecast for demand for crude from the 12-nation cartel to 29.8 mbd in the second half of this year as the global economic rebound is expected to fainter than previously forecast.

At a meeting last month, OPEC ministers kept their production ceiling at 30 mbd, where it has been since January 2012, although actual output has been running higher.

The IEA estimated OPEC's effective spare capacity at 3.23 mbd in May, down from 3.47 mbd in April.

OPEC heavyweight Saudi Arabia led the production gainers, with output jumping by 220,000 bd to a six-month high level of 9.56 mbd, which IEA put down to a seasonal increase for domestic use to meet peak air-conditioning needs.

Despite international sanctions over its disputed nuclear programme, Iran's output edged up 30,000 bd to 2.68 mbd in May.

The IEA estimated that imports of Iranian crude jumped to 1.39 mbd in May from 835 in April, which was mostly due to congestion at Chinese ports at the end of April delaying deliveries until May.

Iraqi production slid by 100,000 bd to 3.14 mbd with exports down by 135,000 bd to 2.48 mbd as northern exports were crimped by repeated pipeline attacks and a dispute between the central government and the Kurdish region.

Kuwaiti production edged up to 2.84 mbd as did UAE output to 2.73 mbd, while Qatar was unchanged at 725,000 bd.

Nigerian crude output fell to a six-month low of 1.96 mbd "as oil theft-related damage to pipelines continued to curb production," said the IEA.

Angolan production edged up to 1.78 mbd, with several fields expected to increase output to peak capacity within the next year and other fields to come on line.

Libyan output dipped to 1.38 mbd on labour-related disruptions to oil flows, said the IEA.

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http://www.globalpost.com/dispatch/news/afp/130612/opec-keeps-pumping-oil-demand-softens