At its December 4 meeting, OPEC members announced they "should continue to closely monitor developments in the coming months," indicating that OPEC producers, led by Saudi Arabia, are continuing the policy of supporting production and defending market share in a low oil price environment.EIA estimates that total Organization of the Petroleum Exporting Countries (OPEC) crude oil and other liquids production increased 3% to 37.4 million b/d in 2015, led by production growth in Iraq.However, EIA analysis indicates that the policy change is unlikely to result in a significant increase in crude exports from the United States given current market conditions exports of crude oil were removed at the end of the year. Canada, Saudi Arabia, Venezuela, and Mexico continue to be the main sources of imported crude oil. imports of crude oil fell to their lowest level since 1995. The Brent-WTI price spread averaged less than $4/b in 2015, $3/b narrower than in 2014, and significantly below the 2011-13 average, when Brent traded nearly $14/b higher than WTI.Despite the decline, production of crude oil averaged an estimated 9.3 million barrels per day (b/d) in 2015, a 7% increase over 2014 and the highest rate since 1972. The decrease was led by reductions in Lower 48 onshore production, which began to fall in April. crude oil production began to decline in the second quarter of 2015. As a result of lower crude oil prices, U.S.Energy Information Administration, Short-Term Energy Outlook, December 2015 Direct use of crude last year rose from around 350,000 bpd in March to nearly 900,000 bpd in July, according to the Joint Oil Data Initiative figures.Source: U.S. Saudi Arabia also burns more crude to generate power heading into the summer months. “Production is always going to grab the headlines, but exports will be more important than ever to focus on,” said Mike Wittner, the global head of oil research at Société Générale. ![]() Saudi refineries ran a record 2.2m bpd of crude in December, up from about 1.5m bpd two years earlier, according to the Joint Oil Data Initiative database. A venture with Total started up in late 2013. The 400,000 bpd Yasref refinery, a joint venture between Aramco and China’s Sinopec, has been steadily ramping up production this year and was due to reach full capacity by mid-February. The Saudi production figure also probably reflects some additional domestic refinery demand. US imports of Saudi crude rose to more than 950,000 bpd over the four weeks to 27 March, the highest since last September, US data shows. The state oil firm Saudi Aramco has raised its prices for the following two months, putting May at the highest level since last year. “While April and May could see a small pullback, overall it is clear that Saudi Arabia has reacted to stronger demand for their crude, despite being in an oversupplied market,” the Energy Aspects chief analyst, Amrita Sen, wrote in a note.ĭemand was stoked in part by deep discounts on Saudi exports in March as the country offered Asian customers the deepest discounts on its flagship Arab light crude in at least 12 years, according to Reuters data. Oil prices rallied on Tuesday after Naimi made separate comments about working with other big producers to stabilise the market – something most analysts see as unlikely in the near future – but it was the production figure that raised eyebrows. ![]() ![]() It also highlights the surprising strength of end-user fuel demand, which has helped lift global refinery profit margins to their highest levels in years. The kingdom and others in the Organisation of Petroleum Exporting Countries (Opec) have refused to cut production to shore up fallen oil prices. The increase in output reaffirms Saudi Arabia’s vow not to cede market share to higher-cost producers such as US shale drillers or Russian giants. He said in the speech in Riyadh that the kingdom’s output would probably remain at about 10m bpd. Naimi did not say why production had increased last month. The kingdom produces more than 10% of the world’s crude. A few weeks ago Naimi pegged production at about 10m bdp, 350,000 bpd above what Saudi Arabia said it pumped in February.
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