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Saudis Slash Oil Output – Claiming ‘Glut’

From an unquestioning Reuters:

Saudi slashes oil output, says market oversupplied

By Amena Bakr And Reem Shamseddine Sun Apr 17, 2011

KUWAIT (Reuters) – Saudi Arabia’s oil minister said on Sunday the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.

And it’s not a particularly subtle signal, either. Maybe they are mad at someone in the White House.

Consumers have urged the exporters’ group to pump more crude to put a cap on oil, which surged to more than $127 a barrel this month, its highest level in 2 1/2 years amid unrest in North Africa and the Middle East.

Oil Ministers from Kuwait and the United Arab Emirates echoed Saudi Arabia’s Ali al-Naimi’s concerns about oversupply and said rocketing crude prices were out of the hands of OPEC, which next meets in June.

"The market is overbalanced … Our production in February was 9.125 million barrels per day (bpd), in March it was 8.292 million bpd. In April we don’t know yet, probably a little higher than March. The reason I gave you these numbers is to show you that the market is oversupplied," Naimi told reporters.

In other words, the Saudis have been cutting production since February. How kind of them.

Two Saudi-based industry sources told Reuters last week the kingdom had cut output due to poor demand, prompting selling by traders who saw it as a sign of a well-supplied market

And yet the price of oil is still skyrocketing. It looks like somebody has repealed the law of supply and demand.

Naimi’s words are the clearest indication yet that OPEC is unconvinced there is a need for more oil despite the civil war that has slashed Libyan output and expectations Japanese demand will rise as it scrambles to rebuild its earthquake-shattered electricity grid

Naimi, who has previously spoken of $70 to $80 a barrel as a desirable range for crude, declined to comment on the price

Nobuo Tanaka, the head of the International Energy Agency, which represents oil importers’ interests, stopped short of saying OPEC needed to boost output, but suggested the group be more flexible in its thinking about supply.

"The market is getting tighter and if it is tighter the price may go up, which may have a negative impact to economic growth," Tanaka told reporters

That’s telling ’em!

OPEC last formally discussed output policy in December and is not scheduled to do so again until June. Members have ruled out holding an emergency meeting before then

Well, look at the bright side. Some of these government might not still be in power come June.

Kuwait may also have reduced output from the 2.42 million bpd analysts and oil traders estimated it pumped in March.

The Gulf state’s Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters Kuwait was currently producing 2.2 million bpd but did not say whether output had been reduced.

Remember how we went to war to protect Kuwait?

It looks like they don’t.

This article was posted by Steve on Monday, April 18th, 2011. Comments are currently closed.

3 Responses to “Saudis Slash Oil Output – Claiming ‘Glut’”

  1. Rusty Shackleford says:

    “…Japanese demand will rise as it scrambles to rebuild its earthquake-shattered electricity grid…”

    This is a bald-faced lie. I’m not sure what they’re implying here but it seems obvious that the newsies think that Japan is now run into the stone age across its entire nation. This is not so. Not even close.

  2. eaglewingz08 says:

    I believe this is Saudi payback for Obama’s disastrous middle east policies and his lack of support of our allies in the region. The Saudis are throwing a shot across the bow of Obowma. They just went to China to shore up defense purchases that otherwise would have gone to the US. But the Saudis don’t know what to make of the present occupant of the Oval Office, so they are hedging their bets now.

  3. Rusty Shackleford says:

    Again, the logical, thinking mind would say, “Gee, why do we put up with the Saudis manipulating the flow of oil?” I mean, if you constantly had to rely on your neighbor to give you a ride to work, and one day the neighbor was really ticked off at you and wouldn’t give you a ride, even though you’ve been paying for their gas every time they fill up out of gratitude, then where would you be? Without transportation. Therefore, logically, it behooves the ride-getter to make other plans, or even…..get a car of their own.

    So with oil available in the United States that dwarfs what the Saudis have, and have been keeping us hostage, it just makes sense to build up production of oil here, while simultaneously working on energy alternatives. Gee, we also have lots and lots of uranium….hmmm. So what’s next, getting it from Brazil, who also hates us? We already get a lot from Mexico and thank God Canada hasn’t turned their backs on us…but give the wee prince time to make that happen.

    The logical, thinking mind says, “We must, as a nation, preserve our freedom and not let any other nation hold us by the throat.” Since Carter started the Dept Of Energy, our dependence on foreign oil has gone up over 30%…I don’t care if that was the intention or an accident. And, there is something to the argument of using other nation’s oil first, and keeping our own in reserve for national security reasons. But that second part relies on a ready-made supply of oil, that can be accessed immediately with no lag time to set up derricks, drill and then pump it out, etc. But let’s say Saudi Arabia stopped all oil completely. Not only would we see lots of stations with “no gas” signs…but it would be in the ten dollar a gallon range and people would go back to puncturing gas tanks and letting it flow into portable containers to steal it. And our supply of fuels would naturally be allocated to the military first.

    I think chairman Obie would like to see this. He might think it would satisfy the greenies who would be having orgasms over it because it would “herald in” the age of the electric car. And even if it didn’t…he wouldn’t particularly care, as he has demonstrated time and time again. If the nation came to a screeching halt, so much the better. But, at that point in time, there wouldn’t be too many “folks” between him and the pitchforks, figuratively speaking. He would be held responsible and no news agency on the planet would be able to spin it otherwise.

    This is not so far-fetched of a notion. He has continuously turned up the heat and kept needling the economy and the people to see where they object and then he waits…and then goes further. He’s hiding behind his “blackness” to protect him form outright criticism but we are beginning to see some cracks. Trump for one. He’s got credibility and, for the most part, was part of the left’s market garden with his shows. Now they don’t exactly know what to do since he’s criticizing chairman Obie loudly and relentlessly. They are trying to ridicule him….but it’s not working.

    But if chairman Obie ruins our flow of oil, he’s gonna be in it…deep.

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