11 December 2016, Vienna — Saudi Arabia pumped record-high amounts of oil in November, amid talks over a global deal to cut production, defying market expectations of lower output on slower domestic demand and refinery maintenance.
The world’s top oil exporter told the Organization of the Petroleum Exporting Countries it pumped 10.72 million barrels per day last month, an OPEC source said, up from 10.625 million b/d in October.
In July, the kingdom’s production was 10.67 million b/d, the previous high.
Iraq said its November output was 4.8 million b/d, up from 4.776 million b/d in October, another OPEC source said, as oil exports reached a record high of 4.051 million b/d.
Gulf OPEC member Kuwait reported output at 2.9 million b/d in November, lower than its 3 million b/d in October, while the United Arab Emirates kept its output virtually steady at 3.195 million b/d, according to official figures reported to OPEC.
Saudi Arabia has pledged to reduce its output to 10.058 million b/d as part of an OPEC deal reached on Nov. 30 to lower the group’s production to 32.5 million b/d.
The rise in November means Saudi Arabia, OPEC’s biggest producer, will have a bigger task in complying with a plan to cut supply starting in 2017 – its first production-reduction deal since 2008.
Saudi crude exports have been high in recent months, reaching 7.812 million b/d in September, while output has stayed at elevated levels despite the usual seasonal decline in winter when domestic consumption of crude burning for power is less.
A Reuters survey estimated Saudi production in November at 10.45 million b/d due to reduced crude use in power plants for air-conditioning, and lower refining.
A Platts OPEC survey in November estimated Saudi oil production at 10.52 million b/d.
OPEC and non-OPEC producers on Saturday reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.
With the deal finally signed after almost a year of arguing within OPEC, the market’s focus will now switch to compliance.
OPEC has a long history of cheating on output quotas. The fact that Nigeria and Libya were exempt from the deal due to production-denting civil strife will further pressure OPEC leader Saudi Arabia to shoulder the bulk of supply reductions.
Saudi Energy Minister Khalid al-Falih said the kingdom may be willing to cut to below 10.058 million b/d next year.
*Rania El Gamal; Editing: Ros Russell & Dale Hudson – Reuters