• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 1 hour China's Blueprint For Global Power
  • 4 hours Boring! See Ya Clowns, And Have Fun In Germany
  • 26 mins Bloomberg: shale slowing. Third wave of shale coming.
  • 1 hour ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 9 hours Crazy Stories From Round The World
  • 3 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 4 hours 5 Tweets That Change The World?
  • 7 hours the future
  • 9 hours Climate Protesters Blocking Roads etc...
  • 3 hours USA Carried Out Secret Cyber Strike On Iran In Wake Of Saudi Oil Attack
  • 3 hours Spain Is On The Edge...Clashes Between Catalonia And "Madrid"
  • 4 hours Leftists crying to make oil patch illegal friendly: 'Broken system' starves U.S. oil boom of immigrant workers: CONGRESS DO YOUR JOBS INSTEAD OF PANDERING!
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Saudi Arabia’s Oil Storage Falling As Exports Exceed Production

The U.S. has seen several weeks in which the levels of crude oil sitting in storage have declined, falling from 80-year record highs. Inventories have dropped more than 10 million barrels since May, offering clues that suggest that the oil market is moving closer to a supply/demand balance.

Although the EIA storage figures are closely watched by oil analysts, a lesser known but similar metric from Saudi Arabia also indicates an oil market continuing to adjust. According to data from the Joint Organisations Data Initiative, and reported on by Bloomberg, Saudi oil inventories have declined for six consecutive months, the longest period of contraction since data collection began 15 years ago.

Saudi oil inventories have drawn down by 38.6 million barrels since October, taking storage down to 290.9 million barrels, a two-year low. The new Saudi energy minister Khalid Al-Falih told Bloomberg TV on June 2 that he sees “a balanced market.” He also said that Saudi Arabia has “started inventory drawdowns that will continue for the foreseeable future.”

Related: OPEC’s Pain Is Only Getting Worse As Revenues Continue To Fall

The declines are contributing to a convergence in supply and demand. As exports continue to exceed production, Saudi Arabia should continue to burn through inventories. But it cannot keep up that pace indefinitely. At some point, if it cannot boost production (or chooses not to), oil exports will have to fall as inventories become low. A drop in exports will tighten global supplies, reducing any remaining global surplus and thereby push up oil prices. Moreover, the drawdowns could increase because of higher domestic oil demand during summer months, as air conditioners run full blast. Saudi Arabia consumes a substantial volume of oil for power generation, upwards of 1 million barrels per day.

But for now, few have noticed the large declines in oil storage levels. “The drop in Saudi crude stocks signals the rebalancing has started,” Amrita Sen, chief oil analyst at Energy Aspects Ltd., told Bloomberg. “Crude stocks are coming off in places where either the data is opaque or the market isn’t paying as much attention.”

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • rjs on June 28 2016 said:
    if it's like our drawdowns, it doesnt mean much...our stores are still 14.6% higher than last June and 36.7% higher than June of 2014...

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play