Saudi Arabia oil pumping at record high as Trump raises pressure

Tuesday, 27 November 2018 00:00 - - {{hitsCtrl.values.hits}}

FILE PHOTO: General view of Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia - REUTERS

DHAHRAN, Saudi Arabia (Reuters): Saudi Arabia raised oil production to an all-time high in November, an industry source said on Monday, as US President Donald Trump piled pressure on the kingdom to refrain from production cuts at an OPEC meeting next week.

The industry source, who is familiar with the matter, said Saudi crude oil production hit 11.1-11.3 million barrels per day (bpd) in November, although it will not be clear what the exact average November output is until the month is over.

Those levels are up around 0.5 million bpd – equal to 0.5 percent of global demand – from October and more than 1 million bpd higher than in early 2018, when Riyadh was curtailing production together with other OPEC members.

Saudi Arabia agreed to raise supply steeply in June, in response to calls from consumers, including the United States and India, to help cool oil prices and address a supply shortage after Washington imposed sanctions on Iran.

But the move backfired on Riyadh after Washington imposed softer than expected sanctions on Tehran. That triggered worries of a supply glut and prices collapsed to below $60 per barrel on Friday from as high as $85 per barrel in October.

Saudi oil industry sources have signalled they wanted prices to stay above $70 per barrel and Saudi energy minister Khalid al Falih said this month global oil supply could exceed demand by over 1 million bpd next year, requiring OPEC to take action.

OPEC will consider a deal to lower production when it meets next week, but Trump again called on Saudi Arabia to refrain from cuts.

On Sunday, Trump thanked himself for lower oil prices and compared it to a big tax cut for the US economy.“So great that oil prices are falling (thank you President T),” Trump tweeted, referring to himself.

Last week, Trump tweeted: “Oil prices are getting lower... Thank you Saudi Arabia but let’s go lower”.