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Saudi oil output hits record high of 11m bpd in November

Saudi oil output hits record high of 11m bpd in November

Mubasher: Saudi Arabia’s oil production leaped to a record of around 11 million barrels per day (pbd) this month after the world's top oil exporter received a stronger-than-usual demand from importers who are concerned about a disruption in Iranian supplies, industry executives tracking the kingdom's output said.

The Organization of Petroleum Exporting Countries’ (OPEC) kingpin nation has been injecting about 10.8 million to 10.9 million bpd of crude, they added, noting that more than 11 million bpd were pumped into the market on some days by drawing down domestic and overseas stocks.

It’s unclear if Saudi Arabia seeks to maintain its rising output and supply rates for the whole month, or output will reduce in the second half of November, bringing the monthly average to a lower level, Bloomberg News reported.

“The November surge will come into the spotlight when OPEC meets on December 6 in Vienna to discuss its 2019 production strategy. Riyadh has already indicated it supports a deep output cut and as a first step will reduce its shipments by 500,000 barrels a day in December from November,” it added.

The OPEC powerhouse told the producer group that it produced around 10.65 million bpd in October.

Earlier this month, Saudi oil minister Khalid Al-Falih said that the kingdom would be producing more in November than October, without providing an estimate.

“We have been increasing production in response to demand,” Al-Falih said.

When Saudi Arabia received requests from clients, known as nominations, for November in the first week of October, the market was struggling with worries over a large reduction in Iranian supplies, propelling buyers to request larger volumes, according to Bloomberg.

After the US administration had threatened to slash Iran’s oil exports to zero, it granted surprise waivers to importers of Iranian crude including China, India, Japan and South Korea, soothing supply fears.

Earlier this month, the International Energy Agency (IEA) said that Saudi crude loadings in the early part of November are higher than in the same period of October.

In November 2016, Saudi Arabia’s oil production hit a record of 10.72 million bpd just before the GCC nation led a group of OPEC and non-OPEC nations in reducing output.

After the agreement, Saudis greatly cut production over the next two months, bringing output down to 9.8 million bpd by January 2017.

Saudi Arabia’s surging output in early November implies that the world’s top three oil producers, namely the US, Russia and Saudi Arabia, are now pumping at, or near, record levels.

The leaders of the three countries will meet at the end of November for the annual G20 summit in Buenos Aires, giving them an opportunity to discuss oil markets a few days before the OPEC meeting in Vienna.