The Saudis are back to being swing producer as they set price and let output adjust.
World inventories are estimated to be falling by over 1.4 million barrels per day, as confirmed by the contango quickly fading to backwardation as we pass the ‘roll period’ for the passive funds.
With demand holding up better than markets anticipated and world non OPEC supply stagnant as well, I would expect demand for Saudi output to rise even as they keep prices firm.
I also expect the Fed to see this as a threat to growth rather than inflationary, and therefore continue to keep rates low.
OPEC February Crude Output down 770,000 Bdl/Day to 27.775 Mln
Mar 5 (Bloomberg) — Crude-oil production from the 12 OPEC members in February declined 770,000 barrels a day from January, the latest Bloomberg survey of producers, oil companies and industry analysts shows. Figures are in the thousands of barrels a day.
Opec Production
February 2009
Opec Country Feb Est. Jan Monthly Output Feb. 1 Change Est. vs. Target* Est. Target Est. Cap. (@) Algeria 1,245 1,275 –30 1,203 42 1,450 Angola 1,670 1,740 -70 1,517 153 2,000 Ecuador 445 475 -30 434 11 500 Iran 3,690 3,780r -90 3,336 354 4,100 Iraq* 2,385 2,365 20 – – 2,500 Kuwait# 2,140 2,280 -140 2,222 -82 2,650 Libya 1,605 1,630r -25 1,469 136 1,800 Nigeria 1,765 1,810 -45 1,673 92 2,500 Qatar 695 725 -30 731 -36 900 Saudi Arabia# 7,860 8,025 -165 8,051 -191 10,800 U.A.E 2,210 2,290 -80 2,223 79 2,800 Venezuela 2,065 2,150 -85 1,986 79 2,500 Total OPEC-12 27,775 28,545r -770 — — 34,500 Total OPEC-11* 25,390 26,180r -790 24,845 545 32,000 *Quotas effective Jan. 1, 2009. OPEC agreed at its Dec. 17 meeting in Algeria to cut its quota target by 2.463 million barrels a day from the previous level, to 24.845 million barrels daily from Jan. 1. The quota target excludes Iraq, which has no formal quota. Indonesia left OPEC at end-2008.
Totals rounded.
r = revised @ = Capacity attainable within 30 days and sustainable for 90 days. # Includes Neutral Zone production shared equally between Saudi Arabia & Kuwait.
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