Saudi Arabia’s crude oil exports jumped to 7.43 million barrels a day (b/d) in September, hitting their highest level since January 2017, as the kingdom drew on its oil stocks to boost supplies to the market.
The September figures were up nearly 220,000 b/d compared with August, according to the latest figures released by the Riyadh-based Joint Organisations Data Initiative (Jodi). It is also the highest level since Opec and non-Opec producers began cutting back output to halt the decline of oil prices in January 2017.
Although the Jodi figures have a two-month lag, the data set is keenly watched in the oil market for its breakdown of total production, and as an indicator of Saudi Arabia’s internal consumption patterns.
While Saudi wellhead production was 10.5 million b/d, Saudi Arabia also drew 93,000 b/d from its crude inventories to supply the market, run its refineries and as feedstock for power generation. It burned 536,000 b/d of crude during the month.
This was the ninth straight draw on stocks, taking the total inventories down nearly 12 per cent to 223.8 million barrels at the end of September. The rise in the kingdom’s supplies to the market was due to higher crude oil prices during the month. Benchmark Brent crude pushed past $80 a barrel for the first time in nearly four years, as buyers looked ahead to impending US sanctions on Iran and declines in Venezuela.
That bullishness has now vanished however, and prices have slipped to about $67 a barrel, as US production has grown and US sanctions on Iran, reimposed from 4 November, were not as hard hitting as had been expected.
A monitoring committee comprised of Opec and non-Opec oil ministers met in Abu Dhabi on 11 November to assess the market ahead of next month’s Opec meeting in Vienna. Saudi Arabia is once again taking the lead by calling for production cuts by Opec and non-Opec nations that took about 1.8 million b/d out of the market for 18 months until last June. Saudi Energy Minister Khalid al-Falih said after the committee met that the producers' group may have to cut as much as 1 million b/d next year, although this is yet to be agreed.
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