Thursday, February 21, 2019

Update On Saudi Production -- Kemp -- Reuters -- February 21, 2019

Link here.
The enlarged group agreed to cut by a total of 1.2 million barrels per day (bpd) in the first six months of 2019, with reductions to be shared between OPEC (0.8 million bpd) and its Russia-led allies (0.4 million bpd).
In the event, Saudi Arabia cut its own output by 380,000 million bpd in January, exceeding its pledged share of 320,000 bpd and accounting for more than half of the total cuts achieved by OPEC in the first month.
Saudi Arabia’s aggressive reductions have compensated for poor compliance with the agreement by some other OPEC and OPEC+ members (“OPEC oil output falls by 890,000 bpd in January”, Reuters, Jan. 31).

The kingdom has gone further and pledged to reduce its output by more than 1 million bpd from 11 million-plus in November to only 9.8 million in March, Oil Minister Khalid al-Falih said in a recent interview with the Financial Times.
The kingdom’s shift has helped to boost front-month Brent futures prices by more than $15 a barrel (30 percent) since late December and push the six-month calendar spread from a $1.70 contango to 45 cent backwardation.
My 10-second sound bit on global production:
  • US, Russia, Saudi Arabia all producing about the same
  • each producing about 11 million bopd
  • total global production: 100 million bopd
  • US production now at record high: 12 million bopd
  • US production will peak at 12.4 million bopd
  • now we see that Saudi Arabia will produce less than 10 million bopd in March (non-air conditioning season in Saudi Arabia in March)
The graphic below is an old graph posted many times on the blog, but one has to go all the way back to 2009 to see Saudi Arabia production drop to 10 million bopd -- this is quite stunning
I've talked about this on numerous occasions over at "The Big Stories."

It looks like I will have to update that chart. LOL See graphic below from this link:

From this link:

I remember all that talk early in the Bakken boom that Saudi Arabia would produce 12 million bopd.

From this link, Saudi oil imported by the US:

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