Saudi Arabia became the world’s largest oil producer last month as U.S. output continued to slide.
According to the International Energy Agency’s latest monthly report, Saudi Arabia’s “vigorous production” allowed it to overtake the United States and become the world’s largest oil producer in August.
The United States has held the top spot as the world’s largest oil producer since the middle of 2014.
Saudi Arabia’s crude supply dipped to 10.6 million barrels per day in August, down slightly from 10.65 million bpd in July, according to Bloomberg.
The oil-rich kingdom pumped an average of 10.36 million bpd during the first eight months of 2016, a 200,000 bpd year-over-year gain.
Saudi Arabia’s total liquids output, a category that includes natural gas liquids, hit 12.58 million bpd in August, besting a U.S. output level of 12.2 million bpd, according to Bloomberg.
OPEC crude production edged up to 33.47 million bpd in August while the group’s overall supply rose 930,000 bpd year-over-year, the IEA said.
The IEA found that high-cost non-OPEC producers have shut in about 1.4 million bpd since the end of 2014.
Production in the United States accounted for more than half of the non-OPEC decline as independent producers slashed costs to cope with low oil prices.
Weakening demand India and China coupled with slowing economic momentum in the United States has dampened demand growth, the IEA said.
The agency said that, despite low oil prices, demand growth continues to slow while supplies increase.
“Consequently, stocks of oil in OECD countries are swelling to levels never seen before,” the agency said.
OECD total inventories built by 32.5 million barrels in July to a new record of 3.111 billion barrels.
World oil supplies fell by 300,000 bpd in August to 96.9 million bpd on non-OPEC production declines, down 300,000 bpd below year-ago levels.
The IEA now expects production to outpace demand until at least the first half of 2017.
Brent crude dipped to $46.48 per barrel after the opening bell on Wednesday, down from $47.10 per barrel at the closing bell on Tuesday.
West Texas Intermediate ticked down to $44.33 per barrel mid-morning on Wednesday, down from a closing price $44.90 per barrel on Tuesday.
Crude prices have hovered just below the $50 per barrel mark as investors wait on the outcome of upcoming informal OPEC meeting.
Two previous attempts to reach a production freeze agreement failed when Saudi Arabia and Iran declined to participate.
OPEC members are set to meet meet on the sidelines of the International Energy Forum.
The forum will take place in Algeria from September 26 to September 28.
OPEC’s next scheduled meeting will be held on November 30 in Vienna.