Saudi Arabia stand to rake in “big bucks” with Syrian War Oil

Saudi Arabian crude output soars to 24-year high: Survey
by Bloomberg News
August 30, 2013 , 11 : 00 pm
New York: Organisation of Petroleum Exporting Countries (Opec) crude production climbed in August as Saudi Arabia pumped oil at the fastest pace in at least 24 years, a Bloomberg survey showed.

Output by the 12-member Opec increased 116,000 barrels a day, or 0.4 per cent, to an average 31.04 million from a revised 30.924 million in July, the survey of oil companies, producers and analysts showed on Thursday. The gain was the sixth in seven months.

Saudi output climbed 150,000 barrels to 9.95 million barrels a day in August, the sixth straight gain and the most for Opec’s biggest supplier in monthly data going back to 1989. It was the largest gain of any Opec member this month.

“The amount of oil the Saudis are pumping is impressive,” said Sarah Emerson, managing principal of ESAI Energy in Wakefield, Massachusetts. “We could be looking at an historic bull trap. Market sentiment may turn bearish by October and November. ”

Brent crude for October settlement dropped $1.45, or 1.2 per cent, to $115.16 a barrel on the London-based ICE Futures Europe exchange on Thursday. Brent is the benchmark for more than half the world’s oil. West Texas Intermediate for October delivery fell $1.30, or 1.2 per cent, to settle at $108.80 on the New York Mercantile Exchange.

July production
The July production total was revised higher by 262,000 barrels a day because of changes to estimates for Saudi Arabia, Qatar, Iraq and Ecuador.

The kingdom will probably keep crude production in September at similar levels to this month and July, according to a person with knowledge of Saudi oil policy, who asked not to be identified because the matter is confidential. Output won’t vary much unless market conditions change, the person said. The United Arab Emirates (UAE) increased its crude output by 120,000 barrels to 2.92 million barrels a day, also the highest level since at least 1989, the survey showed. It was the second- biggest production increase.

Libyan output tumbled 225,000 barrels to 575,000 barrels a day this month, the survey showed. It was the fifth straight decline, sending production to the lowest level since October 2011. Two years after the war that swept the late Muammar Qaddafi from power, Libyan government efforts to revive the oil industry are being stymied by feuding militias and protests.

“It’s clear that the Saudis and Emiratis have deliberately raised production to make up for the massive shortfall from Libya,” said Julius Walker, global energy markets strategist at UBS Securities in New York.

Libyan decline
Libya pumped 200,000 barrels of crude today as negotiations continued with striking workers and guards, state-run National Oil Corp. Measurement Director Ibrahim Al Awami said in telephone interview from Tripoli.

The North African country pumped 1.4 million barrels a day in March, according to Bloomberg estimates.

“The Libyan issues will probably ease before long because the government will send in troops if all else fails,” Emerson said. “If they are back up at even 800,000 barrels a day in a few months, there will be a huge impact on the market.”

Angola production cut
Angola reduced production 40,000 barrels a day to 1.74 million this month, the second-biggest decline in the survey.

The BP-operated PSVM project declared force majeure, a legal clause that excuses companies from delivery obligations because of events beyond their control, on August 18 because of equipment failure.

Nigeria’s production rose 100,000 barrels to 2.02 million barrels a day in August, the third-biggest increase, according to the survey. The country’s oil industry is frequently disrupted by sabotage and unrest in the Niger River Delta, the main crude-producing region.

Iran produced 2.57 million barrels a day in August, up 10,000 from the previous month and down 180,000 from a year earlier. The country pumped 2.5 million barrels a day in May, the least since February 1990. Iran was Opec’s second-biggest producer as recently as June 2012 and is now in sixth place. …more