Saudi Aramco Review 2016

Wellhead output soars

Saudi Arabia’s crude oil output hit an all-time high of 10.673 million barrels per day (mbpd) in July, according to the Opec kingpin’s latest submission to the group, which has nudged up its 2016 global oil demand growth forecast by 30,000 bpd.

The Saudis appear intent on continuing efforts to defend market share, having raised wellhead output by 123,000 bpd from June, taking production levels above the previous record in their submissions to Opec of 10.56 mbpd, for June 2015.

Secondary sources, however, show a shallower increase in Saudi production of 30,000 bpd to 10.48 mbpd. The jump, in which the need to burn more crude in power generation in the kingdom’s scorching summer months is likely another factor, helped raise Opec’s overall July production by 46,000 bpd to 33.11 mbpd, according to the group’s August Monthly Oil Market Report.

The Saudis are facing tough competition in the market share battle. Non-Opec Russia kept liquids output near post-Soviet highs of 10.9 mbpd, while Opec member Iraq made significant gains in July, with production rising by 74,000 bpd from June to 4.32 mbpd, according to secondary sources. Iran also continues to prove its mettle as output edged up by 12,500 bpd to 3.62 mbpd.These increases helped offset falling production figures in two other Opec members.

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