Oil Jumps After Saudis "Explain" Production Surge

Tyler Durden's picture

Having sent crude oil pries tumbling overnight by admitting they cheated on OPEC production cuts, Saudi officials are desperately trying to unwind that faux pas by claiming the over-production was purely for domestic storage. The problem with this "explanation" is that Saudi deliveries to China soared in January...

Bloomberg reports that Saudi Arabia didn’t raise supply to the international oil market in February, according to a person familiar with the kingdom’s oil policy.

The OPEC member increased the volume of oil in storage at domestic refineries and terminals last month, says the person, asking not to be identified because the information isn’t public.

If that's the case then perhaps explain the surge in deliveries to China...

Additionally the unnamed officiasl claimed that OPEC cuts will continue to reduce oil stocks in Q2. Which is odd given that they are building their own storage (according to them) and US crude inventories are at record highs once again.

Of course the machines did not care and just auto-bid WTI...

 

We wonder how long the half-life on this jawbone effort will last?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Belrev's picture

Domestic storage? You mean under the sand? Just keep it there, and don't pump.

Jim Sampson's picture

It's amazing how fast everyone wants it out of the ground...  Does someone or group of people know something the rest of us don't?  Less supply means higher prices...   You sell less but make more...  Anyone???

EvilScientist's picture

Maybe they are pumping oil as long as they can - before the whole clusterfuxx that is saudi arabia implodes. Whether it is the suppressed shia minorities or houthis attacking the southern provinces - that were actually stolen from yemen - there are many instablilties regarding saudi arabia. It might be just wishful thinking but one might hope for the end of this mass exporter of terror and oil!

CRM114's picture

They are not long for this Earth.

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) Jim Sampson Mar 14, 2017 12:30 PM

The earth will run out of oil not too long before it runs out of water. The only thing that SHOULD affect oil price is extraction and shipping costs. Oil formation is an abiotic process.

_RRR_'s picture

let's wait for Gartman going long before making further assumptions

Peacefulwarrior's picture

Confucius says, never trust man who wear bath towel on head

Iconoclast's picture

HTF the Saudis will get away the Aramco floatation is anyone's guess.

Arnold's picture

$50 per is the buzz for a good Aramco IPO.
When? Your guess is good.
After action report:
Blood bath.

nsurf9's picture

If all the world was made of oil, we'd still let these bastards get premium prices for it, because our money is attached at the hip to it!

venturen's picture

it is...and they do.

Iraq is now 4th largest producer....thanks to Bush

Russia is the number 1

Canada is the number 1 exporter to the USA

Once fracking goes world wide....we could see sub $20 oil

 

Why do i care what the saudis so?

_RRR_'s picture

if first they dump prices to hit US shale and some others, then support Aramco ... would be a trade I'd like to support

thunderchief's picture

Oh, can't someone besides the Russians tell the Saudis what a bunch of worthless used car salesman they are?

They are worse than the Lebanese and Iranians. 

SHEESH. ..AA..

 

Yen Cross's picture

 lol- The Arabs are such corrupt POS.  Assuming [caugh*caugh] the Sodomites are telling the truth, that still doesn't affect the huge overcapacity and storage in any meaningful way.

AC_Doctor's picture

The Sand Niggz have the timing of their news "propaganda",  down to a science.  They are masters at manipulating the algos. 

They stick saved Brent from busting through $50.00 and WTI through $47.00.

mily's picture

SandN have been oversupplying camel poo too

2ndamendment's picture

This looks to me like someone has "created" the opportunity for a few of the institutional investors to get out. Don't fall for the headfake, peeps. 

SoDamnMad's picture

Some dayI want to get the autograph and maybe a selfie with "the official who is not authorized" or the "man who does not wish to be identified".

Yen Cross's picture

   China has already stated thated that their GDP will be down in 2017, and their CL storage is @ almost full capacity.

 Even with cutbacks global demand is slowing, while more rigs are coming online and huuuge new deposits are being found.

jerry_theking_lawler's picture

Data doesn't lie. When all of the tanks and tankers are full then there will be a reckoning...until then, it is their games to play and we are just hostages.

justanotherprogressive's picture

Maybe you should consider changing your headline?    Because I don't know exactly what about oil is "jumping" - but I know it isn't the price.....

Börjesson's picture

Well, yes, sales to China are up – but that oil isn't sold in dollars, so that doesn't count towards the quota.

RIP petrodollar.

Last of the Middle Class's picture

Saudi's are fucked. Their lack of diversification and ability to do nothing but pump more of their finite resource has me smiling. Shit those sand niggers deserve what's coming.

Ink Pusher's picture

Bullshit, Bullshit, BULLSHIT!

and ... next week millions of barrels will be "published " as sold in a "drawdown report " .

the reality: not a single barrel will actually move or be sold.

A couple of well placed "keystrokes" and abracadbra the market "stabilizes".

 

BULLSHIT RULES!

 

 

 

Fed-up with being Sick and Tired's picture

Every freaking time we have a pull-back, they Jaw-Bone price.

Ink Pusher's picture

"leverage" has been given a new meaning.

Ink Pusher's picture

The "death throes" of petro-dollars are getting louder by the second.

Fed-up with being Sick and Tired's picture

We are in a range again in oil. I shorted again today at 47.90, took profits at lows, and got out on the bust up. Yesterday, price move away from 49 flat then 48 and now we are about to "resolve" 47 flat. If this continues, weakness prevails no matter the headline. I am a semi-pro trader, my own book, since the early days of dial up.