Saudi Arabian oil output hits record

Saudi Arabia increased its oil production to a fresh record in May as the kingdom stepped up its attempt to win back more customers and as Opec forecasts supply outside the group to fall in the second half of this year.

The Kingdom's output in May reached 10.33m barrels a day, according to numbers submitted by Riyadh to Opec, confirming the widely held view that Saudi Arabia's production is heading higher, Anjli Raval, FT oil and gas correspondent writes.

Saudi's oil output was 10.31m b/d in April, Riyadh told Opec.

In its monthly oil market report Opec also said world oil demand would stand at 92.5m b/d this year, up from 91.3m b/d in 2014, but unchanged from the previous month's report.

"The global economy recovery appears to have stabilised at a moderate level," said the cartel on Wednesday.

The group expects non-Opec supply to decline in the second half of the year, compared to an increase in the first six months of 2015.

It forecasts slower annual growth of 680,000 b/d, in line with previous predictions.

"The current oversupply in the market is likely to ease in the coming quarters," the group said.

Opec expects demand for its crude to stand at 29.3m b/d a day in 2015, but output from the producers' group stand at almost 31m b/d, according to estimates by analysts and traders.