Peninsula - 27/5/2006

The world's largest oil exporter, Saudi Arabia, cut output in April and May to its lowest level in a year due to a seasonal dip in global refinery demand, tanker tracking consultancy Petrologistics said yesterday.

Refiners in the western hemisphere typically shut plants for seasonal maintenance in spring as they prepare to crank up gasoline output ahead of the summer driving season.

Saudi output since April stood at 9.1 million barrels per day (bpd), Petrologistics said. That was down from around 9.42 million bpd in March.

The head of Saudi Arabia's state-owned oil company Saudi Aramco said on May 1 that the country was producing between 9 million and 9.5 million bpd.

"We are satisfying all the demands from our customers," said Abdallah Jumah, Aramco's president and chief executive.

US refiners went through a heavy round of spring maintenance this year to meet tough new cleaner-burning fuel specifications.

"They (the Saudis) are being clever about it, they don't want to flood the market so their output is based on how much people need," Petrologistics head Conrad Gerber said.

"When people don't need it they cut down quietly."

Iran, like Saudi Arabia, cut oil exports in April to match lower demand from refiners.

Hojjatollah Ghanimifard, executive director of international affairs at the National Iranian Oil Company (NICO) said last week that Iran lowers its oil sales every year to reflect this seasonal demand pattern. He said that other producers take the same approach.

Iran restored some of that volume in May and contributed to Opec's total output rising about 100,000 barrels per day on the month.

The Organization of the Petroleum Exporting Countries (Opec) has pumped around 29.9 million bpd so far in May, up from a revised figure of 29.8 million bpd in April, Petrologistics said.

Iran raised output about 200,000 bpd to 3.9 million bpd in May.

Nigeria also raised output about 50,000 bpd to 2.3 million bpd as production increased from new field Erha, which started producing oil in late May.

Output from Erha has helped compensate for some of the 550,000 bpd of oil output that has been shut in since February in Nigeria due to militant attacks.