Why Saudi Oil Production Suddenly Dropped

Authored by Tsvetana Paraskova via OilPrice.com,

As if oil market participants haven’t had enough conflicting market forces to digest over the past week, reports that Saudi Arabia’s crude oil production surprisingly dropped in July by around 200,000 bpd from June further confounded the market and sent oil prices rising on Monday.

Last week, several surveys of OPEC’s crude oil production in July showed that the cartel is pumping at high rates, and Saudi Arabia is nearing its production record. But on Friday, Saudi sources and OPEC sources told news agencies that the Saudi oil production was not even close to record figures—and it actually dropped last month compared to June.

The Saudis pumped 10.29 million bpd in July, Saudi sources told S&P Global Platts on Friday. On the same day, two OPEC sources told Reuters that Saudi Arabia’s crude oil production in July was 10.29 million bpd.

According to OPEC’s secondary sources, the ones the cartel uses to calculate quotas and compliance, Saudi Arabia’s oil production had jumped in June by 405,400 bpd compared to May, to reach 10.420 million bpd.

According to a Reuters survey from last week, Saudi Arabia’s production in July was 10.65 million bpd, but exports were close to June’s levels because the Saudis increased domestic use at power plants and refineries. OPEC’s crude oil production jumped by 340,000 bpd in July from June, as Saudi Arabia pumped near-record volumes, the S&P Global Platts survey showed on Friday.

The numbers leaked by Saudi and OPEC sources on Friday are in stark contrast with many of the surveys.

Some of the Platts survey participants think that Saudi Arabia may have trouble placing its barrels on the market, and demand for Saudi crude may not have been as robust as the Kingdom had expected.

“I think what they’re trying to do is, there’s a story in the market that the Saudis and the UAE and Kuwaitis and Russians were all vastly increasing production well ahead of any cutbacks from Iran, and I think they are trying to change the narrative,” a Platts survey participant said.

Comments

adr Wed, 08/08/2018 - 10:13 Permalink

In a massively oversupplied market, with heavily inflated distillate prices, there really isn't a real market for the actual product.

Thanks to the algos that control 99.9999% of the market, everyone is in a catch 22. If they cut output to reduce inventory, algos see this as a massively bullish move and send prices skyrocketing which reduces demand even more. If they pump more, algos see this as bullish for demand and continue to push prices higher.

The real story is that The Tribe loves to make a shitload of cash churning contracts, so we get the razor lined assrape rod.

Free This Yellow_Snow Wed, 08/08/2018 - 10:25 Permalink

two words = Petro-Dolla! The US reserve must stand so the hegemony continues!

The fiat system in the US was setup to fund the Vietnam War and continues to this day. Nixon was a sneaky one, closed the gold window!

Now look at our DEBT - it is out of control, and we are all gonna fry for it one day. Then there is the illegal Fed, making sure the pain is not too severe! One day it is going to spiral out of control and there will be capitulation!

The king dolla will die a slow death, but the world is awash with it, pumping through the veins of every CB! There will be much pain, until a new paradigm evolves. Tiny nation states all over the world - the squid will lose control at that point!

Now the communist left want to go full retard!

Think local. This game of thrones has to end!

I love America, I hate our .gov!!!!!!! They have become control freaks - Patriot Act, NDAA, Obamacare and the rest!

In reply to by Yellow_Snow

Free This HilteryTrumpkin Wed, 08/08/2018 - 10:47 Permalink

I lived through a civil war and it was bloody, I barely escaped that country but with a bag of clothes, had to leave everything behind!

We had 30 people outside of our home chanting they were gonna chop our heads off and throw them into the sea.

Social Democrats caused it, just like they are going to cause it here! Mark my words.

Antifa is but one organization, but there are many others in the shadows, and they will all marry up one day, then boom...everyone will be confronted with danger!

I hope for peace and harmony, but the left is intent on changing the system from the Constitution to outright communism.

You can take what I say or not, I have experienced it, and will bring it up to warn others, and I will stand against it, cause there is no way I let them take the Constitution down without a fight! I am not running anywhere now!

In reply to by HilteryTrumpkin

lock-stick GoHillary2016 Wed, 08/08/2018 - 11:46 Permalink

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It's all ONE SICK, PATHETIC LIDDLE SPAMMER!!!

In reply to by GoHillary2016

PrivetHedge Yellow_Snow Wed, 08/08/2018 - 12:30 Permalink

Why does the US support this terrorist state ???

Saudi Arabia is only destroying Yemen and murdering one set of people, Israel is murdering the Palestinians too and controlling the US, who is murdering millions in many countries and has already destroyed Afghanistan, Iraq, Syria etc.

A better question would be 'Why does Saudi Arabia support the US/Israeli terrorist state?"
For many arabs, that's the real question.

In reply to by Yellow_Snow

lock-stick PrivetHedge Wed, 08/08/2018 - 15:01 Permalink

It's all ONE SICK, PATHETIC SPAMMER!!!

•• PrivetHedge

•• Free This (SOON COME, in all his 7th grade glory - JACKASS  as new icon!)

•• roea.rita ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")

•• lisa.roy39  ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Leakanthrophy (PORN for Jesus!)

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•• 07564111 ("I PRETEND I DON'T KNOW ANY OF THEM!")

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dozens and dozens and dozens of banned log-on's -- more than seven years!

 

....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.

 

It's all ONE SICK, PATHETIC LIDDLE SPAMMER!!!

In reply to by PrivetHedge

Ink Pusher Wed, 08/08/2018 - 10:32 Permalink

production didn't drop, the Saudis just didn't bother reporting their output for the past month...anything not reported was already undoubtedly sold to North Korea.. LOL

katagorikal Wed, 08/08/2018 - 13:58 Permalink

Saudis produce more oil during the summer for a/c,
but typically exports do not change.
2018 is just returning to the normal pattern of 2013,14,15.

The dog that barked in the night....
The anomaly is the 2016-17 step,
when the summer peak continued into the winter,
ahead of OPEC cuts, so there was no peak in 2017.

MrBoompi Wed, 08/08/2018 - 13:59 Permalink

As long as the "country" sells their oil or other natural resources to the international corporations and funnels the money through Rothschild central banks, it doesn't matter what kind of government this country has.  It can be a dictatorship, a monarchy, a theocracy, communist, socialist, or a democracy.  The only criteria is subservience to the global money interests.