There were signs this week…
Brent Crude prices have held…
Saudi Arabia’s crude oil exports hit their highest in 20 months in September, while the Kingdom’s production in early November appears to have hit the highest on record, on the back of high customer requests made in early October when the market feared a hefty loss of Iranian supply this month.
According to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported oil figures from 114 countries, Saudi Arabia’s crude oil exports in September rose by 219,000 bpd from August to a 20-month high of 7.43 million bpd. This was the highest export level since the OPEC/non-OPEC production cut deal began in January 2017.
Saudi oil production stood at 10.5 million bpd in September, and Saudi Arabia also drew 93,000 bpd from its crude inventories to supply the market, run its refineries, and feed power generation plants.
The JODI data has a two-month lag, but more recent reports say that Saudi Arabia has pumped record volumes of oil in early November. Saudi Arabia’s crude production was between 10.8 million bpd and 10.9 million bpd earlier this month, industry executives tracking Saudi output told Bloomberg on Wednesday.
Related: Saudi Arabia To Raise Oil Shipments To China
The very high production in early November was the result of extra volume nominations from Saudi Arabia’s clients. Those customers had made the nominations in early October, when oil prices rallied on fears that the U.S. sanctions would choke off a lot of Iranian oil supply in November. Saudi Arabia typically decides four to five weeks before the 1st of every month what its production will be, Bloomberg notes.
It’s not clear yet if the Kingdom will keep those very high production volumes through November and what the average November production will be. The current monthly record is 10.72 million bpd, set in November 2016, just before the start of the production cuts.
The U.S. waivers that came along with the sanctions on Iran totally erased the earlier fears of a supply crunch and flipped the market mood to expectations of oversupply, together with expectations of slowing global economic and oil demand growth.
Saudi Arabia has already said that it would be cutting December oil exports by 500,000 bpd from November and that OPEC may have to consider changing course and reduce production again.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.