Saudi Arabia, who is a top global exporter of oil, managed to increase its April crude production to record highs.
This increase managed to boost its flourishing market share in Asia as well as its own refineries and power plants.
On Tuesday, a source from the Gulf industry told Reuters that in April, per day, Saudi Arabia pumped 10.308 million barrels of oil, compared to 10.28 million barrels per day in March.
The source also said that this is an indication that the demand from Asia has increased while there has also been an increase in domestic consumption over the summer since Saudi Arabia uses crude in order to generate power for air conditioning.
This increase in output also highlights how determined Saudi Arabia is to hold onto its market share and to not surrender to higher-cost oil producers like the U.S. shale drillers. Other countries, including Saudi Arabia, that are in the OPEC (Organization of Petroleum Exporting Countries) have resisted reducing production in order to help stop the oil price decline.
Added to this, Saudi Arabia’s increased output also underlines the global demand strength which has assisted in lifting profit margins for refineries to the highest level in years.
Ali al-Naimi, the Saudi Oil Minister, said that the barrels per day (bpd) of oil output will likely remain at about 10 million bpd and he also said that he is “very positive” about the oil demand outlook from Asia.
In April, the crude supply to the market was 10.360 million bpd. Both for export and domestically, the market supply may differ from production as a result of the in-and-out movement of oil in storage.
Going back to records, right to the 1980s, the output in April eclipsed the recent previous high of 10.2 million bpd recorded in August 2013.
A senior delegate from the Gulf OPEC said to Reuters that the increase in the price of oil has been attributed to a stronger than expected growth in demand and a slowing supply, and will most likely continue into the 2nd half of 2015.
Up from January’s $45 a barrel, on Tuesday Brent crude was pushed to a 2015 peak of $65.31 a barrel due to the ongoing conflict in the Middle East as well as indications that the oversupply could ease. The price of oil dropped more than half last year after it reached $115 per barrel in June.
Meanwhile, based on data from the Joint Oil Data Initiative, last year in Saudi Arabia, the direct usage of crude increased to almost 900,000 bpd in June from 350,000 bpd in March.
In February of 2015, it managed to burn 315,000 bpd for generating power while domestic refineries processed crude of 2.084 million bpd.
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