Speaking in Moscow at an energy forum, Khalid al-Falih, Saudi Arabia’s Energy Minister, has indicated that his country is currently producing 10.7 million bpd (barrels per day) of oil and expects to continue this through October, probably with a further slight increase in November.
The move follows calls, most notably by President Trump, for OPEC to do more to fill the shortfall in supply resulting from renewed sanctions on Iran and declining production in Venezuela. It also now means that Saudi Arabia is almost back to the record 10.72 million bpd it was pumping in November 2016 before the OPEC-led production-cutting deal took effect. While al-Falih was unspecific about November production, other than saying it would be a “slightly higher”, it looks very possible that the country will set a new record high.
Reuters also reports that the country has privately agreed with Russia to quietly raise production to counter rising oil prices. Combined with news of rising US oil inventories, this caused oil prices to drop on Thursday, October 4 from their four-year high of $86.74.
Speaking to CNBC, the head of trading for Asia-Pacific at Oanda, Stephen Innes, said:
“Data for last week showed a much more significant than expected … build in U.S. commercial crude [inventories], which generally suggests that oil prices should tumble.”
Together with rising US oil production from companies like ExxonMobil, which supplies Mobil UK stockists, it seems that any oil shortages resulting from geopolitical events will be compensated for by other sources.