NEW YORK -(Dow Jones)- OPEC crude-oil output in May rose by 510,000 on month to 32.47 million barrels a day, boosted by an increase in oil flows from Saudi Arabia, the U.S. Department of Energy reported Tuesday.

The increase in output from Saudi Arabia and Iraq compensated for Nigeria producing well below its capacity, although Africa's largest crude producer saw output rise slightly in May, according to the Energy Information Administration, the Energy Department's information and analysis wing.

Saudi Arabia increased output in mid-May by 300,000 barrels a day, and is expected to produce 9.4 million barrels a day in June, according to a short-term forecast the EIA updates monthly.

OPEC production is expected to rise through September, declining slightly in the fourth quarter.

"OPEC crude oil production is expected to increase during the third quarter of 2008, although this is dependent upon how the security situation in Iraq and Nigeria evolves," the EIA said.

Iraqi production has increased by 100,000 to 2.4 million barrles a day in May. Another 100,000 barrel-a-day rise is seen in June if security conditions permit. Iraq is not currently constrained by OPEC quotas limiting the group's production at 29.99 million barrels a day. This means that, according to the EIA, OPEC, not counting Iraq, is producing 80,000 barrels a day above its self-imposed limit.

OPEC's spare capacity remains concentrated in Saudi Arabia. Owing to the Kingdom's mid-May production increase, spare capacity fell from 1.7 million to 1.4 million barrels a day.

-By Jessica Resnick-Ault, Dow Jones Newswires, 1-201-938-4435; jessica.resnick-ault@dowjones.com

    (END) Dow Jones Newswires   06-10-08 1302   Copyright (c) 2008 Dow Jones & Company, Inc.