Saudi Arabia reported a progressive decline in domestic crude stocks for 16 of the 19 months between November 2015 and May 2017, according to a new report by Reuters.
The news comes as the KSA pressures the United States and Asian countries to lower their domestic inventories and buy new crude supplies, ending the current glut that is keeping oil prices low.
At the end of the period, the Kingdom’s supplies fell to 259 million barrels total – a record low since January 2012. The figure also stands 71 million barrels below a peak in October 2015.
Despite seasonality in the KSA’s domestic oil demand related to heating and refinery maintenance schedules, a downward trend since late 2015 is apparent in the data.
The latest word from the OPEC rumor mill is that de facto bloc leader Saudi Arabia is planning more oil export cuts, causing oil prices to jump earlier this week.
Oil futures jumped up two percent in value after industry consultant Petroleum Policy Intelligence said the KSA had been considering lowering exports by a further 1 million barrels per day.
New production from Libya and Nigeria, two African countries that have been granted an exemption from production quotas due to their previously weak oil output, have brought hundreds of thousands of barrels online in the past few weeks.
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Saudi Arabia tried cutting exports to the United States last month in order to force Gulf coast refiners to use up existing crude inventories, but soon after the announcement, Iraq reached a deal with American buyers to sell its own crude as a substitute for lower Saudi supplies.
The United States will get less than 800,000 bpd of Saudi crude next month, an anonymous source told Reuters last week, down from an average 1.154 million bpd in April – the last month for which there is official data from the EIA.
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By Zainab Calcuttawala for Oilprice.com
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