RIYADH: Saudi Arabia’s oil output is likely to drop to around 9.9 million barrels per day in January and exports are down from December, according to industry sources and shipping data, as the OPEC heavyweight plays its part in a global supply-cut deal. The kingdom, which said it pumped 10.47 million bpd in December, has cut production slightly below the target it adopted under an agreement between OPEC and non-OPEC producers last year, Saudi Energy Minister Khalid al-Falih said last week. The top oil exporter wants to demonstrate its seriousness about the agreement to support the market and prop up prices, and plans to press other exporting countries to follow suit, industry and OPEC sources said. “Production in January will be around 50,000 or 100,000 bpd below 10 million bpd, not much lower,” a Saudi-based industry source said. “Saudi Arabia has a strong position, it wants 100 percent compliance,” an OPEC source said. “It wants to put pressure on other countries to also commit.” Under the accord, the Organization of the Petroleum Exporting Countries plus Russia and other non-members will curtail oil output by nearly 1.8 million bpd, initially for six months starting Jan. 1. Falih said Saudi output had fallen below 10 million bpd, meaning his country had cut production by more than the 486,000 bpd that it pledged late last year under the producer pact. Its deal commitment was a cut to 10.058 million bpd.
A source who monitors Saudi output and exports from outside the country said indications so far pointed to average supply for the month below Riyadh’s OPEC target. “I have very little doubt that supply to market will come in for January just under 10 million barrels per day,” he said. “That’s as good as it gets at this point in time.” Saudi Arabia said it exported 8.258 million bpd in November, the most recent official figure. Crude oil export data for January points to lower shipments. A source at a company that tracks oil shipments said Saudi crude exports had fallen by 150,000 bpd in the first eight days of January from average December levels. Data from Thomson Reuters Oil Research points to an even larger drop. It estimates Saudi crude exports fell to 7.36 million bpd in the first three weeks of January, including 230,000 bpd of pipeline flows from Saudi Arabia to Bahrain. That would be a sizeable drop from the estimate of 7.81 million bpd for all of December.
