OPEC’s biggest exporter Saudi Arabia expanded its crude output in June to a record 10.6 barrels a day, the Financial Times reported referring to the OPEC’s monthly oil market survey. The print in June is 200,000 b/d up from the previous month. If Saudi Arabia keeps on increasing production at the same rate, by late summer the kingdom could be the first country to pump up 11 b/d of crude like the former Soviet Union.
In summer, demand for energy traditionally grows in countries with a desert climate like Saudi Arabia due to a larger use of air conditioners. Therefore, the energy consumption has reached its peak.
Since April, crude has been trading on average at over $60 a barrel on the global market. So, crude prices have approached levels advantageous to producers of shale oil and other hydrocarbons with a high output cost. US oil companies are mainly interested to fix prices at the current level as production will lack commercial sense at lower sales prices.
This resolute stance is posing a challenge to Saudi Arabia. The key OPEC player is keen to redistribute the bigger share of the crude market in favor of the countries producing oil at a low cost, namely in favor of Saudi Arabia itself and other countries at the Persian Gulf.
