Saudi Arabia raised crude production in February to 9.15 million barrels a day, an increase of 100,000 barrels daily from the previous month, an official with knowledge of the country’s oil policy said.
The world’s largest crude exporter supplied 9.16 million barrels a day to the market compared with 9.26 million in January, the Persian Gulf official said, asking not to be identified because the information is confidential. Crude delivered from storage accounted for the 10,000 barrel-a-day excess of supply over production in February, the official said.
The monthly gain in output came after Saudi production declined in January to the lowest level since May 2011, the official said. Saudi Arabia produced close to 9 million barrels a day for a third month, helping to keep OPEC’s total output near the group’s official target of 30 million barrels. The Organization of Petroleum Exporting Countries pumped an average of 30.7 million barrels a day in February, as rising Libyan production outpaced the cut by Saudi Arabia, according to data compiled by Bloomberg.
“The 9.15-million level in February is way below our forecasted average for the year, but we are sure output will increase in the second quarter as demand picks up,” Fahd al-Turki, a senior economist at Riyadh-based Jadwa Investment Co., said by telephone. “Saudis will increase production for sure, but it will not be as sharp as last year’s levels.”
Jadwa forecasts that Saudi production will reach 9.6 million barrels a day this year, down from 9.9 million in 2012, al-Turki said. Demand in the second quarter will probably rise from local use and greater consumption in Asia, he said.
Al-Turki said Saudi production cuts in recent months are a response to slower demand, mainly domestic.
“With the current high oil prices, OPEC countries are responding to demand more than their response to the group’s ceiling,” he said. Brent crude futures for April settlement ended at $110.85 on March 8 on the London-based ICE Futures Europe exchange.
National Commercial Bank, Saudi Arabia’s largest lender, estimated in a March 6 note that the nation’s 2013 crude output will average 9.5 million barrels a day.