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Saudi Arabia Pumps All-Time Record Amount of Oil Amid Pressure From Washington

Sputnik News

02:32 27.11.2018(updated 02:33 27.11.2018)

Saudi Arabia raised the production of oil in November to its highest in the history of the country amid US President Donald Trump's calls for the lowering of oil prices.

An OPEC meeting, at which the members will consider how to arrest a decline in oil prices, will be held after leaders of top global oil producers – Russian President Vladimir Putin, Saudi Crown Prince Mohammed bin Salman and Trump – travel to Argentina for a G20 summit this week. And Saudi Arabia is expected to refrain from production cuts, an industry source told Reuters on Monday.

The source said that Saudi crude oil production hit 11.1-11.3 million barrels per day (BPD) in November, although the exact average daily output will be clear only after the month's end.

The levels to which Saudi Arabia has increased production are 0.5 million BPD up – equal to 0.5 percent of global demand – from October and more than 1 million BPD higher than in early 2018, when OPEC members were curtailing production together. OPEC and Russia agreed to cut production for the first time since 2016, yet Russia has also raised production steeply in recent months to a post-Soviet high of 11.4 million BPD.

Analysts at Goldman Sachs, one of the most active banks in commodities, said the G20 meeting could be a catalyst for prices to rebound, noting that they "expect an OPEC cut and its announcement to lead to a recovery in [Brent] prices."

Saudi oil industry sources have indicated they wanted prices to stay above $70 per barrel, and Saudi energy minister Khalid al Falih said this month that global oil supply could exceed demand by over 1 million BPD next year, asking OPEC to intervene, Reuters reported. Falih also noted that state oil giant Saudi Aramco would ship 0.5 million BPD less crude in December than in November following falling demand from customers.

The US, which is not an OPEC member state and has not participated in the output reductions, has repeatedly called on OPEC to refrain from cuts. Trump, who has maintained his support for Saudi Crown Prince Mohammed bin Salman despite calls from many US politicians to impose sanctions on Riyadh over the killing of Washington Post columnist Jamal Khashoggi last month, has requested numerous times that Saudi Arabia keep oil prices lower. According to sources cited by Reuters, the crown prince wishes to avoid confrontation with Washington, including on oil prices.

On Sunday, Trump complimented himself and took credit for lowering oil prices, comparing them to a tax cut for the US economy.

Riyadh agreed to raise its oil output steeply in June in response to calls from consumers, including the United States and India, to help cool oil prices and address supply shortages after Washington reimposed sanctions on Iran, the third-largest OPEC oil producer.

© Sputnik