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Page added on April 17, 2015
Saudi Arabia Oil Output Rises To Highest In 30 Years As US Output Levels Of
Saudi Arabian oil production has increased to its highest level in three decades, just as U.S. output is expected to drop from its 30-year high. Fearing a loss of global market share, the oil-rich kingdom has kept its crude oil spigots open despite a U.S. oil boom that’s contributed to a glut driving prices to about half what they were a year ago.
The Organization of Petroleum Exporting Countries (OPEC) said Thursday that Saudi Arabia’s March daily crude oil output averaged 10.29 million barrels per day, an increase from the previous month of 658,800 barrels per day. The increase is equivalent to more than half of the oil coming out of the northern Bakken formation that’s at the center of the U.S. oil extraction boom, according to Bloomberg.
“Crude oil output increased mostly from Saudi Arabia and Iraq,” said OPEC’s monthly oil market report released Thursday.
Meanwhile, OPEC predicts that U.S. crude and petroleum liquids output this year will peak in the current quarter, to 13.65 million barrels per day before production begins to level off and then decline toward the end of the year. This estimate is in line with U.S. Energy Information Administration and International Energy Agency forecasts that see U.S. oil output falling later this year.
Thanks to hydraulic fracturing – a controversial, water-intensive process that squeezes oil and natural gas from underground shale formations – U.S. crude output has nearly doubled in seven years. The output caused a global oil glut that tanked crude prices, which is now causing drillers to scale back on production. Once oil is extracted, it costs money to store to wait for prices to rise, and U.S. oil storage capacity is also operating at peak levels.
Fearing it could lose the Asian market to its competitors as oil shipments shift away from the U.S., Saudi Arabia has been selling its oil at a discount in that region. But earlier this month Riyadh said it would raise prices next month for oil it sells in Asia, from 90 cents below the regional benchmark price to 60 cents below. The price hike is a signal that officials in the country with 16 percent of the world’s proven oil reserves believe the recent oil glut is coming to an end.
Brent crude increased 3 percent on Thursday to its 2015 high, above $63 per barrel, as traders reacted to Thursday’s OPEC report. “People are realizing that the U.S. production juggernaut is slowing, at least for now,” Virendra Chauhan, oil analyst at Energy Aspects, a London-based consultancy, told Reuters.
4 Comments on "Saudi Arabia Oil Output Rises To Highest In 30 Years As US Output Levels Of"
BobInget on Fri, 17th Apr 2015 9:55 am
How longer can these writer prostitutes
continue to perpetuate some myth about Saudi “market Share”?
In actual fact this is a life or death power struggle between Iran and Saudi Arabia.
Isn’t it enough proof, Saudi Aircraft bombing
Iranian client state Yemen?
The fact that KSA has in fact RAISED production levels should by itself prove
belligerent intent towards ‘brother OPEC members, Iran, Venezuela, Nigeria,
Iraq, Ecuador, Algeria..
The Saudis by aiding al-Qaeida,
http://www.nytimes.com/2015/04/17/world/middleeast/khaled-bahah-houthi-rebel-yemen-fighting.html?_r=0
continue to play the US, Europe, for fools.
Plantagenet on Fri, 17th Apr 2015 12:15 pm
The Saudi strategy of seizing market share from the USA and other suppliers is succeeding so far, but Ghawar is very close to peaking and that will spell the end of Saudi dominance in OPEC and the world oil markets.
joe on Fri, 17th Apr 2015 1:46 pm
When will people get it? Peak oil theory is playing out in front of us. Hubbert theory is all about easy-oil not tough-oil. With most of the world in genuine peak production, even if we had world peace the world would still be in slow decline. That’s why even after three federal reserve q-e’s, the world economy is not growing the way they wish or need it to. There is the pensions timebomb due to begin in the next few years. If globalistion slows then the west does not grow at screaming pace to induce enough immigration to pay the pensions and Healthcare costs then there really will be an economic depression and inflation. Modern global Fiat currency systems are simply expressions of oil prices and property prices etc because they are the things that they won’t make any more of. Simply put Saudi know that if they cut now, along with weak global growth and future climate related energy laws then they probably will never need to pump as much again, same goes for rest of Opec. Venezuela and Iran might be squeezing but if they cut now they won’t be asked b to pump more ever. If they take pain now, then tough oil is going to be the uneconomic option Hubbert and everyone else at that time thought it was. Economically, if we go ahead and give energy companies all they need to get tough oil then the cost to society will be too high due to the leverage involved and the increased frequency of the unwinding of such leveraged positions. This debt driven society only works when we can always push the ‘payment due date’ down the road.
Nony on Fri, 17th Apr 2015 3:52 pm
How’s Hubbert do on peak gas?