Oil: Saudi Arabia’s production exceeds 11 million barrels/day in August


The Kingdom had not reached this level for 2 years…










Photo credit © Reuters


(Boursier.com) — Very interesting monthly report from OPEC. The cartel initially left its forecast for global crude demand unchanged for 2022 and 2023, indicating that major economies are doing better than expected despite headwinds such as soaring inflation. He estimates that oil consumption will increase by 3.1 million barrels per day (mbd) in 2022 and by 2.7 mbd in 2023.

The Organization of the Petroleum Exporting Countries expects “oil demand in 2023 to be supported by continued strong economic performance in major consuming countries, as well as potential improvements in Covid-19 related restrictions. and reduced geopolitical uncertainties”. The outlook could also be strengthened by fiscal support measures in Europe and China, or a resolution of the conflict in Ukraine.

More interestingly, the cartel’s monthly report shows that OPEC production rose by 618,000 bpd to 29.65 mbd in August, largely due to the resumption of Libyan supply. But above all, we learn that Saudi Arabia increased its crude production to just over 11 million barrels a day last month, exceeding this symbolic level for the first time in two years as the kingdom seeks to stabilize the market. . Saudi production has only rarely reached 11 million barrels in recent decades. Riyadh said it increased its supplies from 236,000 barrels a day to 11.05 million a day in August, almost exactly hitting its target for the month. The neighboring United Arab Emirates added 51,000 bpd to the market, at 3.18 mbd.

This increase in the production of two of the main countries of the Organization should however be short-lived insofar as the Kingdom and its allies are once again tightening their supply in response to a darkening economic context. Last week, OPEC+ agreed to a token cut of 100,000 barrels a day next month to deal with “higher volatility and heightened uncertainty” in the oil market.

OPEC has also reiterated its view that oil futures do not accurately reflect the realities of supply and demand, which distorts companies’ ability to hedge. “The market is in a state of schizophrenia, which creates a sort of yo-yo market and sends the wrong signals,” reads the September report.

The next OPEC meeting is scheduled for October 5.


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