According to the latest reports Saudi Arabia will cut crude oil shipment to its customers in the month of August by more than 600, 000 barrels per day. This action is taken by the Saudi government to balance the rise in domestic consumption during the summer, while staying within its OPEC production commitment. This is said by the Saudi industry source.
“There is strong demand for our crude but we are sticking to our OPEC commitments,” this is said by the source who is aware of the kingdom’s oil policy. On Wednesday this is said.
The source also said, “In order to meet its OPEC quota and meet its domestic demand during summer Saudi Arabia has made big cuts in allocations internationally by more than 600, 000 bpd for the month of August.”
The source further added that the crude exports for the month of August will fall to their lowest level this year at around 6.6 million bpd. And the crude distributions to Asia will be cut down about 200, 000 bpd to 3.5 million bpd, while allocations to Europe will be down by around 70, 000 bpd at 520, 000 bpd. The oil majors were allocated some 200, 000 bpd less in August at 780, 000 bpd. And the exports to the Unites States will be below 8000, 000 bpd in the month of August.
It is told by the Saudi Arabia to the Organization of the Petroleum Exporting Countries that its oil production is rose to 10.07 million bpd in the month of June. This is somewhat above its OPEC target. This is mainly due to an upsurge in domestic crude burning for power during summer.
May port closers as pushing some cargoes into June, which may have resulted in higher June exports, mentioned by source. The source also said that the July output would be lower than June, but did not provide details.
The Saudi source said there are signs of improvement in market fundamentals “Saudi Arabia is keen to see an improvement in the oil market and accelerate the balancing process, and expects other producers to do the same.”
The source further said: “While supply is not increasing except exempt countries such as Libya and Nigeria, demand is picking up and we are starting to see inventory draws in total petroleum stocks in recent weeks. Saudi Arabia will continue to work closely with other producers to monitor and stabilize the market by making sure that production cuts are continuing.”