Saudi Arabia’s crude oil exports in June dropped to their lowest level in 33 months, while Saudi oil inventories were down to a level last seen in early 2012, according to data by the Joint Organizations Data Initiative (JODI), suggesting that Saudi exports had likely further dropped in July and continue to fall in August.
Saudi crude oil exports fell in June by 35,000 bpd from May to hit a 33-month low at 6.89 million bpd, while crude oil stockpiles hit a 65-month low, or the lowest since January 2012, at 257 million barrels.
“You can assume exports will fall even further going forward because they can’t keep running down stockpiles,” Amrita Sen, an analyst at Energy Aspects in London, told Bloomberg.
In addition, Saudi Arabia is one of the few countries that burns oil to produce electricity, and the summer season with scorching heat is a peak demand season for the domestic electricity needs to keep air conditioning running.
Saudi Oil Minister Khalid al-Falih said last month that OPEC’s biggest producer and exporter would further cut its crude oil exports in August, to 6.6 million bpd, which would be nearly 1 million bpd lower than the exports in the summer of 2016.
The Saudis are also significantly cutting their crude oil exports to the United States, after Riyadh stated a couple of months ago that it would purposely reduce exports to the U.S. to force a reduction in the world’s most transparently reported inventory.
On Wednesday, the EIA reported a hefty draw in U.S. commercial oil inventories a day after the API surprised analysts by estimating inventories had declined by 9.2 million barrels. Related: Has Gulf Of Mexico Production Peaked?
The EIA calculated that commercial inventories of crude oil had gone down by 8.9 million barrels in the week to August 11, after a draw of 6.5 million barrels a week earlier.
Oil prices, however, did not rally on the hefty draw, because the EIA also reported that U.S. crude oil production rose last week to 9.502 million bpd from 9.423 million bpd the previous week, to the highest weekly level since the third week in July 2015.
As of 11:01 AM CST, WTI is up 0.26 percent at $46.90 per barrel. Find more oil prices from across the world on the Oil Price Charts page.
By Tsvetana Paraskova for Oilprice.com
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