Saudi Arabia is likely to keep its oil output steady throughout the rest of the year as world oil consumption is expected to rise and domestic demand for crude eases during the winter.
Oil prices have slid on ample supplies and concern about weakening demand on slowing economic growth in Europe and China, raising the question of whether Saudi Arabia will curb output to support prices.
But industry sources in Saudi Arabia said the Kingdom will continue with its basic policy of supplying the market according to needs.
Riyadh had always said that it adjusts oil supply to accommodate its customers and not to drive the price.
The top exporter and holder of the world’s largest spare capacity cut its output by around 400,000 barrels per day in August.
But the amount of crude supplied to the market – both domestically and for export – inched up to 9.688 million bpd, compared to around 9.66 million bpd in July, indicating no change in Saudi oil supply policy.
“As we approach winter and with the end of the refinery maintenance season, global demand is likely to pick up therefore Saudi oil production is not expected to see a major change,” an industry source said on Thursday.
“Output may fluctuate according to the customers’ needs and market circumstances,” the source said, adding that production in September for the OPEC heavyweight is expected to remain steady.
Industry observers see Saudi crude output at around 9.5 million to 9.6 million bpd in the coming months when seasonal demand picks up. Saudi exports will probably stay around 6.9 million to 7.1 million bpd until December.
Oil prices rose on Thursday to around S97 a barrel, but were not far from the lowest since July 2012 reached the previous day as abundant supply and a strong dollar weigh on prices. Libya’s oil output has risen in recent weeks, while Iraq continues to produce without interruption despite the fighting there.
But Saudi oil minister Ali al-Naimi has played down concerns about the fall in prices below $100 and said it was too early for OPEC to act. Other Gulf oil ministers and delegates have bet on expected rising demand as winter approaches.
“I would expect relative output stability from Saudi Arabia, unless of course we see further or renewed large-scale disruptions in Libya or elsewhere,” said analyst Samuel Ciszuk of the Swedish Energy Agency.