News flash: the oil glut isn’t going away any time soon, not when the world’s largest producers has record stockpiles. From Wael Mahdi at bloomberg.com:
Exports fall as output stays above 10 million barrels a day
Nation leading OPEC to defend market share as prices fall
Saudi Arabia, the world’s largest oil exporter, is storing record amounts of crude in its quest to maintain market share as it cut shipments.
Commercial crude stockpiles in August rose to 326.6 million barrels, the highest since at least 2002, from 320.2 million barrels in July, according to data posted on the website of the Riyadh-based Joint Organisations Data Initiative. Exports dropped to 7 million barrels a day from 7.28 million.
“The fall in Saudi crude exports reflects the market reality,” Mohammed Ramady, an independent London-based analyst, said Sunday by phone. “It’s normal to see this fall knowing that the market is becoming highly competitive, with many countries in OPEC selling at discounts and under-pricing the Saudi crude.”
Crude inventories have been at record highs since May, a month before Saudi Arabia’s production hit an all-time high of 10.56 million barrels a day. The nation has led the Organization of Petroleum Exporting Countries in boosting production to defend market share, abandoning its previous role of cutting output to boost prices.
Brent crude oil prices have slid 13 percent this year amid a global supply glut. Brent futures for December settlement dropped 2.3 percent to $49.30 a barrel in London on Monday.
Saudi Arabia cut oil production in August to 10.27 million barrels a day from 10.36 million in July, according to the JODI data. The kingdom told OPEC that it produced 10.23 million barrels daily in September. It pumped at an all-time high of 10.56 million barrels a day in June, exceeding a previous record from 1980.
To continue reading: Saudi Crude Stocks at Record High
