Saudi Arabia's oil exports seen below 7 mln bpd in summer

Author

15 June, 2017

Some of last year's readings inched closer to implied demand of 10 million barrels a day, he said. Early indications suggest that remains the case this month, one of the sources said. High stockpiles have weighed on crude prices.

Crude prices have fall by more than 10 percent since late May, pulled down by a supply glut that persists.

In the report, OPEC pointed to continued high compliance by its members with the supply deal and said oil stocks in OECD nations fell in April-although they are still 251 million barrels above the five-year average.

Overall, Saudi exports are set to be lower than past year, when the kingdom shipped about 7.4 million bpd on average from May to August. The credit must go to Saudi Arabia and Russian Federation for their strong leadership in ensuring the rest of OPEC adopted the proposal they first jointly made over three weeks ago. However, that optimism seems to be fading amid higher production from the United States and reports of impatience within the OPEC with lower oil price.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.2 million barrels, EIA said.

Total exports of crude oil from OPEC member countries stood at 25.01 mb/d in 2016, up from 23.49 mb/d in 2015, representing a 6.5 percent growth rate y-o-y, the bulletin said remarking that the bulk of crude oil from OPEC members was exported to the Asia Pacific region at a level of 15.72 mb/d or 62.9 per cent. "There is too much oil from the USA, too much oil from Libya, too much oil from Nigeria", said Fereidun Fesharaki, founder and chairman of consulting group FGE, which focuses on oil and gas markets east of the Suez and in Europe and the U.S, reports CNBC.

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With regards to the prices, the ASB indicated that the OPEC Reference Basket averaged $40.76/b in 2016, down from $49.49/b in 2015 and reaching the lowest yearly average since 2004.

Gasoline inventories now sit at 242.4 million bbl, or 9%, above the five-year average of 223 million bbl, according to EIA data.

As at the end of the first quarter, commercial inventories of oil in the OECD - as opposed to strategic stocks held by governments - had actually risen versus the end of December, despite supply cuts having begun during that period.

The increase was largely because members that are exempt from the output cuts agreed in November, such as Libya and Nigeria, increased production after prior curtailments due to civil unrest.

Iran's oil production and its share of OPEC output are now both back around pre-sanction levels, according to BP Statistical Review of World Energy June 2017.

Cash-strapped USA shale firms scaled back their hedging programs in the first quarter, leaving them more vulnerable to tumbling spot market prices just after OPEC reached a landmark deal to curb global supply.


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