The Organization of Petroleum Exporting Countries boosted crude oil output in May, a survey by Dow Jones Newswires showed Wednesday, as the oil-producer group loosened its grip on production amid rising demand and record-high price levels of above $120 a barrel.
The survey estimates daily production by all 13 of the group's members in May rose 1.35%, or 432,000 barrels a day, from the previous month to 32.39 million barrels a day.
In April OPEC-13 production had dipped by 0.81% to 31.96 million barrels a day.
Production by the group's 12 members with output quotas increased 362,000 barrels a day, or 1.22%, last month to 29.99 million barrels a day, the survey shows.
The latest numbers, based on input from oil traders, analysts and industry sources, show that that OPEC-12 in May produced about 247,000 barrels a day above the group's production target of 29.67 million barrels a day.
May's production hike was largely driven by OPEC's top producer, Saudi Arabia, which at 9.35 million barrels a day pumped an additional 250,000 barrels a day of crude compared with April.
"Following a visit by President Bush, Saudi officials announced their intention to raise output by 300,000 barrels a day citing 'customer requests' as the reason behind the move," said Ehsan Ul Haq, head of research at Vienna-based JBC Energy.
"The increase only came into effect on May 10 and the full impact of this increase will not be felt until June," Ul Haq added.
The survey shows Iraq's production rose by 70,000 barrels a day to a daily rate of 2.4 million barrels, the highest level so far this year.
"Increased exports from northern Iraq, which should average 475,000 barrels a day in May, have seen production figures in the country rise," Ul Haq said.
Although Iraq has managed to keep oil production at sustained high levels in recent months, it remains constrained since the U.S. invasion in 2003. From the beginning of the year, the country is the only one outside OPEC's quota system.
Output was up by 30,000 barrels a day in Nigeria although production remained below capacity due to ongoing losses in supply as a result of unrest and sabotage in the Niger Delta, which have added to already heightened supply concerns.
Nigeria's production stood at 1.85 million barrels a day in May.
Rising OPEC output comes ahead of an expected increase in global oil demand in the next quarter as summer driving season in the U.S., the world's largest oil consumer, kicks in.
The 13-nation oil group, whose output meets around 40% of the 87 million barrels consumed globally each day, is facing increased pressure from consumers in Europe and the U.S. where there is rising concern that high fuel costs may lead to a steep economic downturn.
Although crude oil futures on the New York Mercantile Exchange have slightly retreated from new record highs above $135 a barrel in May, political pressure on OPEC to act to ease prices remains high.
At 0823 GMT, the front-month July Brent contract on London's ICE futures exchange was down $0.88 at $123.70 a barrel.
The front-month July contract on the New York Mercantile Exchange was trading $0.66 lower at $123.65 a barrel.
U.S. Treasury Secretary Henry Paulson said Monday pressure on crude oil prices is mainly the result of a shortage in supply, with speculation and the depreciation of the U.S. dollar only being "small factors" behind the latest price surge.
Officials at OPEC on the other hand have maintained their view that it is both those factors, speculation and a weakening U.S. dollar, which are beyond their control, that are fueling crude oil prices.
"I think there's a consensus that oil price increases are due to non-fundamental support. It means other factors, mainly non-fundamentals, mainly psychological, they contribute to oil price fluctuations and OPEC cannot do anything," Iran's new OPEC governor Mohammad Ali Khatibi told Dow Jones Newswires Monday.
OPEC's next meeting is scheduled to take place in Vienna on Sept. 9.