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Saudi Output Reaches Record as Trump Presses for Cheaper Oil


Saudi Arabia is pumping more crude than at any time since its first barrel was extracted 80 years ago, responding to pressure from U.S. President Donald Trump to keep driving oil prices lower.

Saudi daily output reached 11.2 million barrels a day, from 10.8-10.9 million barrels earlier this month, according to a person familiar with the matter, who asked not to be identified because the data is private. While Brent crude, the global benchmark, already tumbled as much as 33 percent since early October, Trump a week ago tweeted: “Thank you to Saudi Arabia, but let’s go lower!”

The surge in Saudi supply comes two weeks before the kingdom and its allies in the OPEC+ group meet in Vienna to set policy for 2019. Negotiations have already started and will likely intensify later this week at the G20 summit in Buenos Aires, where the leaders of Saudi Arabia and Russia and their oil ministers are scheduled to meet. The two nations are the world’s biggest crude exporters.

“In the past, G20 summits have provided the opportunity to negotiate informally the broad contours of the production agreements that OPEC+ members have later ratified,” Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London, said in a note to clients.

Drill Baby Drill

Saudi oil production hits an all-time high above 11 million barrels a day

Source: Bloomberg News

Data up to Oct 2018 is Bloomberg survey. Nov 2019 is latest available.

Brent fell last week to a one-year low of $58.41 a barrel, down from a four-year high of $86.74 in early October. Prices have slumped as the U.S., Saudi Arabia and Russia increase supply close to a record, at a time when traders are fretting about slowing growth in demand in emerging markets, particularly in Asia.

Trump has repeatedly used Twitter to ask Saudi Arabia and other OPEC members to boost production. In January, Saudi production was below 10 million barrels. More recently Trump has compared lower oil prices to a tax cut and a tool to keep inflation low, giving the U.S. Federal Reserve the opportunity to stop raising interest rates.

Saudi output has also been rising as the kingdom seeks to ensure enough supply as Iranian exports slump following the re-imposition of U.S. sanctions. Buyers of Saudi crude ordered more barrels in early October to guard against a sudden plunge, although in the end the U.S. administration granted more waivers than anyone was expecting.

It’s unclear whether Riyadh plans to keep boosting output and a Saudi oil official declined to comment. The surge this month also means that the kingdom is effectively setting a high baseline for any future cut in output. Saudi Arabia has already said it supports a drop in output and has pledged to reduce oil exports by 500,000 barrels a day in December, compared with November.

Key decision makers will be at the G20 summit in Buenos Aires later this week, in a meeting that may well decide the direction of oil prices in 2019. Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin, who have been working together to manage the oil market for the past two years, both plan to be in the Argentinian capital.

“Both have a common interest in seeing a production cut to mitigate the potential future surplus created by the mismatch between the rise in OPEC+ output and the volume of waivers issued for Iranian oil,” Jeffrey Currie, the head of commodities research at Goldman Sachs Inc., told clients in a note.

Resisting Trump’s desire for lower oil prices would require the Saudi crown prince to go against the White House, just after the president publicly backed him following the killing of Saudi national and Washington Post columnist Jamal Khashoggi.

Khalid Al-Falih and Alexander Novak, the Saudi and Russian energy ministers, are also scheduled to travel to Buenos Aires, according to people familiar with their plans. Their presence reinforces the impression that Saudi Arabia and Russia will try to reach a deal before the OPEC meeting a few days later.

“We believe OPEC+ countries will come to an agreement despite recent tweets from the U.S. arguing for lower oil prices,” Currie wrote.


33 Comments on "Saudi Output Reaches Record as Trump Presses for Cheaper Oil"

  1. makati1 on Tue, 27th Nov 2018 7:16 am 

    I see the village idiots, Davy and MOB, are back spewing their usual bullshit and lies. Their immature putdowns have no backup to prove their rebuttal, just arrogant bullying.

    Perfect examples of why the US is going down the shitter faster every day. Brainwashed, uneducated, immature snowflakes.

    I didn’t bother to read any of this recent bullshit as it would just be a waste of time. Too bad they don;e and never will have, a life that matters. I am enjoying watching the US insane asylum from the shores of the Phili[pines, far from the freak dhow called America.

  2. makati1 on Tue, 27th Nov 2018 7:17 am 

    don;e = don’t lol

  3. Davy on Tue, 27th Nov 2018 7:48 am 

    “I see the village idiots, Davy and MOB, are back spewing their usual bullshit and lies. Their immature putdowns have no backup to prove their rebuttal, just arrogant bullying.”
    Translation: I am the village idiot hypocrite spewing my usual bullshit and lies. My immature putdowns speak for themselves.

    LOL, billy is heading for bed so we will get a reprieve from the village extremist.


  4. I AM THE MOB on Tue, 27th Nov 2018 7:59 am 


    Debt, Not Trade War, Is China’s Biggest Problem

    Officially China’s debt is a small number: 47.60%. Unofficially, it’s hard to figure it out. For a good reason: the government is both the lender and the borrower. One branch of the government lends money to another branch of government. Government-owned banks, for instance, lend money to State Owned Enterprises (SOEs) and Town Village Enterprises (TVEs). But there are some unofficial estimates. Like one from the Institute of International Finance (IIF) last week, which place China’s debt to GDP at 300%!

    The Chinese “economic miracle” is built on a mountain of debt. As Chinese GDP grew over 12-fold in 20 years to $12.24 trillion at the end of 2017, credit in the Chinese financial system grew over 40-fold, taking the debt-to-GDP ratio from 100% to 400%, if one counts the shadow banking system. Shadow banking credit aggregates are omitted from official statistics, but they add at a minimum 100% to the total debt to GDP ratio for China (see this Brookings Institution paper).

    China central bank chief warns of ‘Minsky moment’

    Better find a new horse to plug, this one died at the gate..


  5. I AM THE MOB on Tue, 27th Nov 2018 8:00 am 

    Tesla China sales plunge 70 percent in October: auto industry body

  6. I AM THE MOB on Tue, 27th Nov 2018 8:14 am 

    Davy here is a quote that sums up Clogg and Mak perfectly

    “I imagine one of the reasons people cling to their hates so stubbornly is because they sense, once hate is gone, they will be forced to deal with pain.”

    ― James Baldwin

  7. Cloggie on Tue, 27th Nov 2018 8:21 am 

    Mob, who sistently advotes the murder of millions of Russians in an unprovoked nuclear strike, wants to lecture us about “hate”.

    There is no greater hater than him.

  8. JuanP on Tue, 27th Nov 2018 8:24 am 

    Mak “I see the village idiots, Davy and MOB, are back spewing their usual bullshit and lies.” You are lucky that you are up when they are down; I never get a break from the friggin’ fools.

  9. I AM THE MOB on Tue, 27th Nov 2018 8:40 am 


    I don’t hate Russia..I just want my country to steal their resources because supplies are going to start running out soon..

    Its either us or them..Adapt or die..Nothing personal against Russia..

  10. I AM THE MOB on Tue, 27th Nov 2018 8:41 am 


    The American way of life is non negotiable..

    -Dick Cheney

  11. Cloggie on Tue, 27th Nov 2018 9:09 am 


    The American way of life is non negotiable..

    -Dick Cheney

    I fully agree with the wisdom of Dick Cheney here, there will be no negotiations.

    The plug will simply be pulled.

  12. dissident on Tue, 27th Nov 2018 9:16 am 

    So, no market economics when it comes to oil. The price has to be contrived as in a command economy. The problem with cheap oil prices is that they fail to regulate consumption. So the ultimate result if faster depletion of the resource. In other words, the whole approach is retarded.

  13. I AM THE MOB on Tue, 27th Nov 2018 9:21 am 

    Europeans are weak. Muslims are strong.

  14. JuanP on Tue, 27th Nov 2018 9:30 am 

    So, Saudi Arabia, Russia, and the USA are producing oil at all time record high levels. One third of global oil production and virtually all growth are coming from them. I am keeping my eyes on these three suckers. When will they peak? Expectation is eating me up! We are definitely getting closer to Peak Oil every day.

  15. Davy on Tue, 27th Nov 2018 9:32 am 

    Dirty Juan. You are the villiage criminal and gimmiegrant. Lol FOOL

  16. Cloggie on Tue, 27th Nov 2018 9:58 am 

    Europeans are weak. Muslims are strong.

    Fertility rate is dropping everywhere. In Morocco it is ca 2.1. When they are in Europe there is not much difference with whites.

    Dream on.

    I am worried about Israelis though as they are about to drown demographically:

    That was a joke, I don’t give a f* if they drown. Wrong neighborhood, should have listened to Dolfie.


  17. Krug on Tue, 27th Nov 2018 11:05 am 

    Oil peaked in 2005, as all the greats prophesied. Do not believe these production numbers from KSA, they are lies!!!

    Matt Simmons was killed to shut him up, but read between the lines and see that the great decline and die off has already begun, right on schedule.

  18. JuanP on Tue, 27th Nov 2018 12:30 pm 

    Delusional Davy “Dirty Juan. You are the villiage criminal and gimmiegrant. Lol FOOL”
    Projecting again, Davy?

  19. Davy on Tue, 27th Nov 2018 12:35 pm 

    meandering, dirty juan?

  20. Davy on Tue, 27th Nov 2018 12:45 pm 

    “shale band” theory”

    “WTI Crude Tumbles Back To $50 Handle, Credit Markets Crack”

    “U.S. oil production has skyrocketed this year, leaving even the most optimistic forecasts in the dust. But, the recent crash in oil prices could do what the much-hyped pipeline bottlenecks could not – slow down shale production. Between 2015 and 2017, shale drilling activity fluctuated with oil prices (though on a several-month lag), with drillers deploying rigs and adding output when prices rose, and scrapping rigs and dialing back on activity when prices dipped. Drilling and production has always fluctuated with prices, but the much shorter lead times for shale compared to conventional drilling, meant that the oil market was responding much quicker to price changes. The ebb and flow of drilling activity gave rise to the “shale band” theory, which dictates that oil prices had an upper and lower bound, largely decided by shale output. Whenever prices tested one of those limits, U.S. shale would steer them back into the middle of the range. More specifically, if prices rose to, say, $60 per barrel, shale activity would ramp up and new supplies would come online, dragging prices back down below that threshold. If prices fell to $40 per barrel or below, drilling dried up and the drop (or slowdown in growth) tightened the market just enough to push prices back up.”

  21. Davy on Tue, 27th Nov 2018 12:49 pm 

    “Brazil Eyes $30 Billion Offshore Oil Boom”

    “President-elect Jair Bolsonaro wants to open more of the pre-salt assets – an area currently exclusively in the hands of state oil firm Petrobras – to private investors, hoping to earn US$31 billion (120 billion Brazilian reais) that could help narrow Brazil’s massive budget deficit.”

  22. I AM THE MOB on Tue, 27th Nov 2018 3:28 pm 

    Tariffs could cost American households $2,400 each in 2019, a new study warns

  23. makati1 on Tue, 27th Nov 2018 5:43 pm 

    JuanP, yes the 13 hour time difference is nice. (14 hours for Missouri) I can easily ignore them unless they stay up all night.

    It is another nice, sunny, Wednesday morning here. Going up to 30C this afternoon. I’ll probably go to the wet market later for a kilo of fresh shrimp, maybe a marlin steak or two and some anchovies for the cat. All fresh caught. Nothing frozen and thawed here, and half, or less, the cost in the US.

  24. makati1 on Tue, 27th Nov 2018 5:50 pm 

    MOB, $2,400 is only part of the cost to the US of Trump’s tariffs. Already, large and small companies are planning to move out to cheaper lands like Mexico or Asia, raising the US unemployment and cutting tax income to the government.

    Trump has no idea what destruction he is causing, or maybe he does and that is the idea. Collapse the economy and take down America? He is working hard to accomplish that goal. Short of war, can the US be destroyed in only four years? We shall see.

  25. Davy on Tue, 27th Nov 2018 6:25 pm 

    “I can easily ignore them unless they stay up all night.”

    Liar, you are obsessed with the neutering I give your routine message of distortions and exaggerations. Extremist are so easy to deal with. All one needs to do is show some middle ground and the extremism melts away.

  26. Davy on Tue, 27th Nov 2018 6:27 pm 

    China is in a bad way now billy haven’t you been up on it?

  27. Free Speech Forum on Tue, 27th Nov 2018 7:41 pm 

    Tyranny is not when someone smokes marijuana near you.

    Tyranny is when the government says that you cannot smoke marijuana.

  28. I AM THE MOB on Tue, 27th Nov 2018 8:21 pm 

    Free Speech

    Cannabis use is associated with a substantial reduction in premature deaths in the United States.

    Cannabis use is associated with decreased rates of obesity, diabetes mellitus, mortality from traumatic brain injury, use of alcohol and prescription drugs, driving fatalities, and opioid overdose deaths. These data suggest that Cannabis use may decrease premature deaths.

    The analysis predicts an estimated 23,500 to 47,500 deaths prevented annually if medical marijuana were legal nationwide.

    Cannabis use prevents thousands of premature deaths each year, and Cannabis prohibition is revealed as a major cause of premature death in the U.S.

  29. Davy on Wed, 28th Nov 2018 8:44 am 

    Up the tookus and through the penis, thank you very much.

    Do you spit or swallow?

    It’s like Christmas in my mouth with ebony cock.

    Best for last,,,,,,,nothing like smelling a stinky ass to start ur day.

  30. Davy on Wed, 28th Nov 2018 9:01 am 

    Dirty Juan is back at it with identity theft and his favorite sock, bony juan.

  31. twocats on Wed, 28th Nov 2018 6:35 pm 

    Fixed income, pensions & 401k funds are heavy heavy heavy “energy” (read shale rabbit hole) bonds. so all these boomers and seniors who think they are in “safe haven” assets are getting chewed to pieces by the collapse in credit due to low oil prices.

    this spiral could start an entire round of shale oil bankruptcies and become a feedback loop.

  32. Duncan Idaho on Wed, 28th Nov 2018 7:23 pm 

    this spiral could start an entire round of shale oil bankruptcies and become a feedback loop.
    Yea, with a normal business model.
    Shale doesn’t seem to need to make a profit— just keep the game going. If they stop, it crashes.

  33. makati1 on Wed, 28th Nov 2018 8:04 pm 

    Anyone who believes that their “retirement” funds/plan/401k/etc. will be there when they retire must also believe in Santa Clause and the Easter Bunny. It would require not only BAU to continue until then, but some miracle financial events to find the trillions needed to fund them. Even SS is going to go away soon. If you are not preparing your resources outside the financial system, you will be in for a very short and painful “retirement”.

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