Saudi oil production is in the news again:
The Group of Seven finance ministers last month called on oil exporters to expand production. Saudi Arabia initially reacted coolly to the request, saying that global supply and demand were balanced. But the kingdom has recently taken steps to bring down prices, consulting with large refiners and offering them extra oil.There's more at the FT article linked above, but I wanted to add the chart above for context (which shows all available data from publicly available sources through August). The highest demonstrated production was in March and April of this year when they briefly touched 10mbd, before dropping very slightly in recent months. Apparently the news now is that they will go back to 10mbd.
“The current price is too high,” a senior Gulf-based oil official told the Financial Times. “We would like to see oil prices back to $100 a barrel.” The price of Brent, the global oil benchmark, has risen 33 per cent from mid-June to a peak of $117.95 a barrel on Friday. On Monday it plunged almost $4 in just four minutes, but later recovered.
Saudi Arabia last launched a similar round of consultations with major oil refiners in March, weeks before it boosted its production to a 30-year high of 10m barrels a day. Riyadh is now evaluating the response from refiners.
The nation last month produced 9.9m b/d, but the senior official said that Riyadh was now again pumping around 10m b/d. “We are consulting our clients about their oil needs and telling them we are ready to supply more,” the senior official said.
Interesting that production increases of 100-150kbd are news. 100kbd represents about 0.1% of global production. If you accept a low figure for short term elasticity of -0.02, then that could, in theory, lead to a 5% decline in the price of oil. However, it's significantly smaller than the normal month-to-month fluctuations in global oil production, so it's just as likely to be lost in the noise.