Saudi Oil Output May Rise In June, But...

Saudi Arabia’s oil output may edge up in June, sources familiar with the kingdom’s policy said, but the extra crude may be used for domestic power generation rather than providing the boost to exports that Washington has been seeking. Reuters sources said any rise in Saudi output would still be within its output quota in a pact on supply cuts agreed between OPEC and its allies, a group known as OPEC+. Production from the world’s top crude exporter in May is expected to be around 10 million barrels per day (bpd), slightly higher than April but still below its quota under the OPEC-led pact of 10.3 million bpd, industry sources said. Riyadh often lifts output in the hot summer months to fuel oil-fired power plants and meet rising electricity demand, which means exports do not necessarily rise. One of the sources said the May output rise was not related to Washington’s push for more OPEC oil after it ended waivers granted to buyers of Iranian oil. The waivers had allowed them to purchase crude from Iran despite U.S. sanctions. U.S. President Donald Trump said last week he had called Saudi Arabia and OPEC and told them to lower oil prices, but he did not say who he spoke to or when the conversations took place. Oil prices rose to a six-month high last week above $75 a barrel, partly due to concerns about falling Iranian supplies. Brent was trading around $70 on Thursday. “The Saudis want oil prices to stay at current levels at least for a month or two. They don’t want to raise their production above the 10.3 million bpd, because they are part of the OPEC+ pact, but they are also being pressured by the U.S. to increase their output,” one of the sources said.

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The Biggest Crude Oil Reserves 

 

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Saudis get more respect than they deserve....

  • Haha 1

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Oil production per capita (2018): 

Kuwait: 65 barrels per 100 people
Saudi Arabia: 31 barrels per 100 people
United States: 4 barrels per 100 people
Angola: 4 barrels per 100 people
Brazil: 1 barrel per 100 people
Nigeria: Less than 1 barrel per 100 people 

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Big oil and money. I figured with the supply cuts (Lead by Saudi arabia) a barrel of oil would go up. But I didn't figure in the less cushion. 

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Considering that Saudi Arabia faces a 100 billion-dollar budget deficit, increasing oil production will reduce oil prices. Consequently, it will cause Saudi economic inflation. So, it's a different point of view about debate on increasing oil production from Saudi Arabia and Emirates...

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