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Saudi Arabia boosted oil production to a record high in November, an industry source said Monday as US President Donald Trump was pressuring the kingdom to take action. 39; he abstains from any reduction in production at an OPEC meeting next week.
The meeting, at which OPEC members will discuss ways to curb the decline in oil prices, comes a few days after the leaders of the world's leading oil producers – Russian President Vladimir Putin, Saudi Crown Prince Mohammed bin Salman and Trump – visited Argentina at the G20 summit this week.
Saudi Arabia agreed to increase its offer in June, following calls by consumers, including the United States and India, to help calm oil prices and remedy the supply shortage after the imposition of sanctions on Iran.
This move turned against Riyadh after Washington imposed less severe sanctions than expected in Tehran. This raised concerns about an oversupply of supply and prices plummeted to less than $ 60 a barrel on Friday, up from $ 85 a barrel in October.
The source of the industry, which is familiar with this issue, said that Saudi crude oil output fell from 11.1 to 11.3 million barrels per day (bpd) in November, but will not know exactly what will be the average production of November before the end of the month.
These levels increased by about 0.5 million bpd – or 0.5% of global demand – from October and over one million barrels per day more than 39 in early 2018, when Riyadh had reduced its production with other members of OPEC.
Russia's non-OPEC, which has teamed up with Saudi Arabia in the first joint production cuts led by OPEC since 2016, has the producers of Goldman Sachs, one of the The most active banks in the commodities sector also indicated that the G20 meeting could have a catalytic effect on price rises in recent months, reaching 11.4 million barrels a day. "We expect a reduction in OPEC and its announcement for a price recovery (in Brent)," the bank said in a note.
Khashoggi Factor
Saudi oil sources say they want prices to remain above US $ 70 by Saudi Energy Minister Khalid al Falih said this month that the world oil supply could exceed the demand of more than one million bpd next year, forcing OPEC to take action.
Falih announced earlier this month that Saudi oil giant Saudi Aramco would ship 0.5 million bpd. less raw in December than in November, as customer demand was lower. The crisis surrounding the badbadination of journalist Jamal Khashoggi at the Riyadh consulate in Istanbul last month may complicate Saudi decisions on oil production.
Trump supports Saudi Crown Prince Mohammed bin Salman, despite calls from many US politicians to impose stiff sanctions on Riyadh. Prince Mohammed is the ultimate Saudi policy maker in the oil sector and Saudi observers have said the prince would try to avoid a confrontation with Washington, including oil prices.
The United States is not a member of OPEC and does not participate in the reduction of production. Trump has repeatedly called on OPEC to abstain from cuts and has been pressuring the group in recent days.
On Sunday, Trump was thanked for the drop in oil prices and compared it to a significant tax cut for the US economy. "So good that oil prices are falling (thanks to President T)," Trump told Twitter. Last week, Trump tweeted: "Oil prices are falling … Thank you Saudi Arabia, but let's go lower."
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