 |
Louisiana Light • 2 days | 86.60 | -0.08 | -0.09% | ||
|
Bonny Light • 1 day | 88.69 | -0.04 | -0.05% | ||
|
Opec Basket • 2 days | 87.35 | -2.29 | -2.55% | ||
|
Mars US • 168 days | 77.67 | -1.57 | -1.98% | ||
|
Gasoline • 12 hours | 2.710 | -0.003 | -0.13% |
|
Bonny Light • 1 day | 88.69 | -0.04 | -0.05% | ||
|
Girassol • 1 day | 89.20 | -0.10 | -0.11% | ||
|
Opec Basket • 2 days | 87.35 | -2.29 | -2.55% |
|
Peace Sour • 20 hours | 75.30 | -0.05 | -0.07% | ||
|
Light Sour Blend • 20 hours | 78.35 | -0.05 | -0.06% | ||
|
Syncrude Sweet Premium • 20 hours | 85.30 | -0.05 | -0.06% | ||
|
Central Alberta • 20 hours | 75.70 | -0.05 | -0.07% |
|
Eagle Ford • 2 days | 79.21 | +0.04 | +0.05% | ||
|
Oklahoma Sweet • 2 days | 79.25 | +0.00 | +0.00% | ||
|
Kansas Common • 3 days | 73.00 | -2.50 | -3.31% | ||
|
Buena Vista • 3 days | 86.86 | -2.40 | -2.69% |
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Saudi Oil Exports Holding Strong Despite Production Cut Commitment
Saudi Arabia’s crude oil exports fell just slightly in February, in stark contrast to the bold voluntary production cuts that the Kingdom had offered to make, according to PetroLogistics and Kpler data cited by Reuters.
Saudi Arabia had shocked the oil markets when it voluntarily offered to withhold an additional million barrels of oil production per day from the market in addition to what it was already tasked with cutting as part of the OPEC+ group. It vowed to continue those cuts through April.
But data shows that Saudi Arabia’s amibitious commitment to cut an extra million barrels per day hasn’t spilled over into exports. According to PetroLogistics, Saudi Arabia’s February exports likely fell by just 300,000 bpd.
Kpler’s estimates are even more disappointing. Their data shows that Saudi’s oil exports fell by 194,000 bpd, while domestic inventories shrunk by 119,000 bpd. According to Kpler, however, Saudi Arabia’s exports toward the end of February were lower than at the beginning.
Related Video: Can Saudis Defend Aramco from Houthis?
Saudi’s Energy Minister Prince Abdulaziz bin Salman Al-Saud was asked after the last OPEC+ meeting last week if he would comment on reports that the country had not fulfilled its voluntary cuts as promised. The Energy Minister refused to answer since the cut was voluntary and not part of an OPEC+ commitment, according to Reuters, adding that “we are trustworthy people.”
While the market is not fully seeing Saudi Arabia’s million barrels per day taken off the global market, the market certainly is enjoying the after-effects of Saudi Arabia’s commitment not only to cut an additional million barrels per day but to keep doing so through April. The price of a Brent barrel has surged $8 since February and is now trading at more than $68 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
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Open57.81
Trading Vol.6.96M
Previous Vol.241.7B
A very thin line separates Saudi oil production from its oil inventory. So when Saudi Arabia says it can supply the market with 12 million barrels a day (mbd) for instance, it shouldn’t be taken to mean that it has a production capacity of 12 mbd. It only means that Saudi Arabia will produce 9 mbd and withdraw 3 mbd from its oil inventory to supply the market.
Similarly, Saudi Arabia could promise to make a voluntary cut from production from say 10 mbd to 9 mbd while still exporting virtually the same volume. This is so because it offsets what it describes as a 1 mbd-cut in production by a withdrawal of an equivalent volume from its inventories.
In real life and with Saudi consumption being the same, cutting production by 1 mbd should result in an automatic reduction of exports by the same volume unless Saudi Arabia withdrew 1 mbd from its inventory thus maintaining the level of exports as the reports are suggesting.
That may be the reason why Saudi’s Energy Minister Prince Abdulaziz bin Salman refused to comment when asked on reports that the country had not fulfilled its voluntary cuts as promised.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Most stimulus checks have already been spent.
I would expect oil prices to moderate in the coming weeks once the Spring Break craziness runs its course.
Long Amtrak
Strong buy