Crude prices dropped on Wednesday after Saudi Arabia reported record production of 10.3 million barrels per day in March, a figure the country’s oil minister said was unlikely to fall by much.
The decline in prices followed a rally on Tuesday in which U.S. crude approached 2015 highs on strong jobs data, as well as government forecasts for lower U.S. crude production growth and higher global demand for oil.
Saudi oil minister Ali al-Naimi told reporters late on Tuesday that the March figure of 10.3 million barrels per day (bpd) would eclipse its recent peak of 10.2 million bpd in August 2013, according to records going back to the early 1980s.
Brent May crude was down 73 cents from its last settlement at $58.37 a barrel by 0100 GMT, while U.S. May crude fell over a dollar to $52.96 a barrel. Both futures have dropped around 50 percent since June last year, when prices began to fall.
Naimi did not say why production had increased last month. He said in the speech in Riyadh that Saudi output would likely remain around 10 million bpd.
Ali al-Naimi also said that the kingdom stood ready to “improve” prices but only if other producers outside the Organization of the Petroleum Exporting Countries (OPEC) joined the effort.
The U.S. dollar index, which measures the greenback against a basket of currencies, rose 1.22 percent on Tuesday, resuming a recent upward trend and weighing on crude prices.
Meanwhile, Royal Dutch Shell is in advanced talks to buy BG Group in the first oil super-merger since the early 2000s to extend its global lead in gas production and close the gap with the world’s biggest independent oil major ExxonMobil.
Reuters