Saudi Arabia Produces More, Supplies Less Oil In September

Saudi Arabia supplied less oil in September even as its output edged up, an industry source familiar with the matter said on Thursday.

Supply to the market – both domestically and for exports – may differ from production depending on the movement of barrels in and out of storage.

The dip in supply comes when some in OPEC have called on its biggest producer to cut back outut to support oil prices, but the Kingdom has been quietly telling market participants it is comfortable with oil prices below $90.

It produced 9.70 million barrels of crude oil per day in September, up from 9.597 million bpd in August, the source said

But the amount of crude supplied to the market from the top oil exporter fell to 9.36 million bpd in September, from 9.688 million bpd in August, according to the source.

The source did not give a reason for the drop in crude supply.

The kingdom typically burns less crude for power generation when the weather starts to cool off, which may free up more crude for exports in the coming months, analysts say.

Saudi oil use for power generation was 769,000 bpd in August, down from 899,000 in July, according to official figures released earlier this week.

Saudi crude exports fell in August to 6.663 million bpd for the fourth month in a row to their lowest levels in three years, as the world’s largest oil exporter fights for market share amid weak demand and ample supplies from rival producers.

September exports figures were not available yet on the website of the Joint Organisations Data Initiative (JODI).

Saudi crude exports have been sliding in the past few months as shale oil squeezes its oil out of U.S. markets and as demand in Asia, particularly in China, has been slower than expected.

Saudi Arabia is likely to keep its oil production steady throughout the rest of the year, an industry source told Reuters last month.

OPEC meets to review policy on Nov. 27. So far Gulf members of the Organization of the Petroleum Exporting Countries have indicated their reluctance to cut output to lift prices.

Brent crude LCOc1 traded below $85 a barrel on Thursday.

Libya’s OPEC governor told Reuters on Wednesday that OPEC should cut its oil output by at least 500,000 bpd.