Risks for new Energy Crisis Lessened

Risks for new Energy Crisis Lessened

Top oil producer increased exports piercingly

Top oil producer Saudi Arabia increased exports sharply in the past week and is offering extra supplies to its biggest customers worldwide in what industry sources said appeared to be a bid to tame runaway crude prices, Reuters reported.

Saudi exports surged to just over 9 million bpd in the last week, compared to an average of about 7.5 million for January, three industry sources said.

“Those export numbers are very reliable but they’re only for a week so they don’t tell you whether or not they’re going to sustain these levels,” said one industry source.

“Exports could be bunched for a week but this is an unusual export number,” said another.

Oil industry watchers routinely assess output from Saudi Arabia and other OPEC producers on a monthly basis to smooth out variations over shorter periods.  Saudi oil officials did not respond to requests for comment.

If Riyadh were to maintain exports at 9 million bpd it would imply record volumes from OPEC’s leading producer of 11 million bpd, up more than a million bpd from last month. Saudi currently is using about 2 million bpd domestically.

Riyadh pumped about 9.75 million bpd in January, industry surveys show. The export data for the past week shows sales to Asia climbing to 6 million bpd with volumes bound for the United States approaching 1.5 million, a three-year high.

Other sources at oil companies who buy Saudi crude said that Riyadh was offering extra oil both in addition to existing long-term contracts and on a one-off “spot” basis.  One said Riyadh appeared to be seeking to “control the price” by offering more oil.

 

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