Saudi Arabia’s national oil company reported today that it had produced just over 10 million barrels/day of crude oil, the country’s highest production in more than 30 years. That’s 550,000 barrels/day more than the Kingdom produced in October.
Saudi oil minister Ali al-Naimi told Bloomberg Businessweek that production was so high because “that’s what the customers wanted.” He also said that the oil market was in balance and that Saudi Arabia is prepared to pump at the November level “if customers want the same thing in December.”
The Saudis raised prices for all blends it sells to Asian customers by $1.60-$1.95/barrel. Energy consultant JBC Energy GmbH commented:
Steep price hikes for the light end of the kingdom’s crude slate may be aimed at avoiding a potential supply glut,” JBC said. “The most benevolent interpretation is that the kingdom wants to ensure a no-cut decision at the upcoming OPEC meeting without ruffling too many feathers.
If production from Libya and Iraq rises, the Saudis may adjust their production, according to al-Naimi.
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