Saudi Arabia’s crude oil production
A Reuters survey reported that Saudi Arabia’s crude oil production rose by 3,000 barrels per day to 10.7 MMbpd (million barrels per day) in August 2016—compared to the previous month. Saudi Arabia’s crude oil production hit an all-time high in August 2016. The summer heating season drives the demand for domestic crude oil. To learn more, read Saudi Arabia: Weather Will Be a Key Demand Driver of Oil in 2H16. As a result, production rose due to higher export requirements and demand.
Saudi Arabia ahead of oil producers’ meeting
Saudi Arabia’s energy minister reported that Saudi Arabia doesn’t target any output levels. Higher demand would motivate Saudi Arabia to produce more crude oil. This suggests that Saudi Arabia isn’t keen on capping crude oil production. However, it might freeze production in the future. For more read Part 1 and Part 2 in this series.
Saudi Arabia’s crude oil production capacity
Saudi Arabia’s crude oil production capacity is 12.5 MMbpd. High spare capacity gives Saudi Arabia the advantage of raising crude oil production and pressuring crude oil prices.
A rise in crude oil production from Saudi Arabia will have a negative impact on crude oil prices. Lower crude oil prices will have a negative impact on oil producers such as Warren Resources (WRES), Cobalt International Energy (CIE), and SM Energy (SM).
In the next few parts of this series, we’ll take a look at the monthly US crude oil production.