Saudi Arabia Production Crude Oil Increase

Saudi Arabia Production Crude Oil Increase

FlagSaudi Arabia is increasing its crude production in response to U.S. President Donald Trump to keep driving oil prices lower.

Saudi daily production reached 11.2 MMpbd from 10.8-10.9 MMbpd earlier this month, according to a source that do not want to be named and the sensitivity of the information.

The production surge for Saudi supply comes two weeks before OPEC group meet in Vienna to set new policy for 2019. Negotiations have been on their way and will likely continue during the G20 summit in Buenos Aires, where the leaders of Saudi Arabia and Russia including their oil ministers are scheduled to meet. The two nations are part of the top oil exporter producer in the world.

In the past the G20 summits provided the opportunity to informal negotiations with OPEC and their members.

U.S., Saudi Arabia and Russia have increased their supply while demand from emerging markets like Asia demands have been increasing.

Saudi output increase as the kingdom seeks to ensure enough supply as Iranian exports has been sanctioned by the United States. Buyers of Saudi crude have increased their orders in October to guard against a sudden plunge.

Key decisions should be made during the G20 summit in Buenos Aires, the price direction for 2019 should be decided. Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin has been working for the past two years to manage the oil market.

They both have a common interest in seeing a production cut to mitigate the potential future surplus. But they still have to work with President Donald Trump who is the third world producer would like to lower oil prices.

It is most likely a deal between The Crown Prince and Russian President could be reached before OPEC’s meeting.

It would be interesting to see how The Crow Prince Mohammed bin Salman, Russian President Vladimir Putin and U.S. President Donald Trump are going to get along, what would come out of the G20 summit? Alliances are being tested as volatility of the oil crude markets has been felt across the world.

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