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Page added on September 19, 2012
Latest Saudi Oil Production
Saudi oil production is in the news again:
The Group of Seven finance ministers last month called on oil exporters to expand production. Saudi Arabia initially reacted coolly to the request, saying that global supply and demand were balanced. But the kingdom has recently taken steps to bring down prices, consulting with large refiners and offering them extra oil.
“The current price is too high,” a senior Gulf-based oil official told the Financial Times. “We would like to see oil prices back to $100 a barrel.” The price of Brent, the global oil benchmark, has risen 33 per cent from mid-June to a peak of $117.95 a barrel on Friday. On Monday it plunged almost $4 in just four minutes, but later recovered.
Saudi Arabia last launched a similar round of consultations with major oil refiners in March, weeks before it boosted its production to a 30-year high of 10m barrels a day. Riyadh is now evaluating the response from refiners.
The nation last month produced 9.9m b/d, but the senior official said that Riyadh was now again pumping around 10m b/d. “We are consulting our clients about their oil needs and telling them we are ready to supply more,” the senior official said.
There’s more at the FT article linked above, but I wanted to add the chart above for context (which shows all available data from publicly available sources through August). The highest demonstrated production was in March and April of this year when they briefly touched 10mbd, before dropping very slightly in recent months. Apparently the news now is that they will go back to 10mbd.
Interesting that production increases of 100-150kbd are news. 100kbd represents about 0.1% of global production. If you accept a low figure for short term elasticity of -0.02, then that could, in theory, lead to a 5% decline in the price of oil. However, it’s significantly smaller than the normal month-to-month fluctuations in global oil production, so it’s just as likely to be lost in the noise.
9 Comments on "Latest Saudi Oil Production"
BillT on Wed, 19th Sep 2012 3:34 pm
Much noise signifying nothing.
SOS on Wed, 19th Sep 2012 6:50 pm
From that graph it looks the “boom years” for the peak oil proponents were 2002 and 2009. Now we see record production. That graph is an absolute rebutal of peak oil.
indigoboy on Wed, 19th Sep 2012 9:19 pm
The Saudi’s are big on talk but poor on action. They pretend that they can fill the gaps of declining production from the rest of the world’s oil sources. But in reality they are pedalling like crazy to keep at 10mbls.
If they [Saudis], could keep pace with demand, why then, is there talk from the US about releasing oil from the Strategic Petroleum Reserve? Because Saudi is lying about their ability to produce to demand levels.
Saudi will not (cannot), meet demand, and Obama will announce an SPR release just about 3 to 4 weeks from the November election. And as this pulls fuel prices down (temporarily) from their $4.00 per gallon, dumb Americans will vote him back in, as King of the Hill.
But by Jan/Feb 2013 those morons will be back at the pumps watching those digits spin at $4.20 per gallon again.
BillT on Thu, 20th Sep 2012 1:28 am
No, SOS, that graph is a set of numbers showing how the rig count is dropping along with oil produced. The Saudis don’t have the capacity to replace any lost production anywhere in the world. They do have a great reason to lie, their lives depend on their people believing they can keep the show going. When they see that they cannot, as will eventually be obvious, heads will Saud family heads will roll. They don’t worry about voting in a new puppet, they just revolt and change leaders.
SOS on Thu, 20th Sep 2012 1:52 am
Oil rig count and production are at all time highs. The graph isnt that tough tot read.
FarQ3 on Thu, 20th Sep 2012 5:05 am
Yes SOS, rig count looks about 48 which is high however KSA has yet to break the 10Mbbl/d mark even though oil in storage is going out to users at a record pace. Iran is still producing and selling via the front AND back door ‘off the books’ so to speak.
Pacman on Thu, 20th Sep 2012 8:26 am
It’s all still bellow what Matt Simmons said they wouldn’t be able to produce ever again To prove him wrong they need to produce more than 12Mbd Which seems extremely unlikely
BillT on Thu, 20th Sep 2012 10:40 am
Not only unlikely, but impossible for any length of time Pacman. Saudi Arabia is almost over. Soon it will be renamed Arabia as the Saud family will go down with the oil production.
Nuclear on Thu, 20th Sep 2012 3:21 pm
Check how much of those Oil are heavy crude oil which needs more refining and more usage of natgas in the process.
They are struggling to maintain 10 million b/d, how are they going to ramp upto 12 million b/d as they promised.