Can Saudi Arabia pump much more oil?

LONDON (Reuters) – The leader of Saudi Arabia has assured US President Donald Trump that the United States can raise oil production if needed and has 2 million barrels per day of spare capacity to compensate for falling output in Venezuela and Iran.

In a tweet on Saturday, Trump said Saudi Arabia has agreed to increase output, but a subsequent statement from the White House rowed back on this assertion.

Either way, the kingdom, OPEC's largest member, can barely raise output by 1 million bpd to 11 million bpd and even that would be difficult, according to industry analysts who forecast a more expensive price rally due to a lack of new supply .

OPEC analysts:

ANDURAND PIERRE, hedge fund manager

"I guess the Saudis want to give some confidence to Trump to go very hardcore on Iran. Exports to zero or an attack. It will be interesting to see what Saudis can really do for long. It seems that Iranian regime changes the name of the Saudis. "

AMRITA SEN, Chief Oil Analyst at Energy Aspects

" We will be in unchartered territory. While Saudi Arabia has the capacity in the theory, it takes time and money to bring it online, possibly up to 1 year ".

GARY ROSS, Head of Global Oil Analytics at S & P Global

"The Saudis do not have 2 million bpd of spare capacity as it would imply production of 12 million bpd. They said they would likely be producing a maximum of 11 million and that would be running their system at stress levels, "said Ross.

He added that with a potential output fall of up to 1.5 million bpd in Iran and further outages in Venezuela, the world could be short of over 2 million bpd of oil output by the end of the year.

OLE HANSEN, Head of Commodities Research at Saxo Bank

"We are seeing another strong signal from the world of oil prices. With Russia, we agree on the subject of political interference in the world. Saudi Arabia agrees to such a request that OPEC has played out its role with Saudi Arabia, and the US are now setting the agenda. "

" I do not believe that Saudi can increase production to 12 million bpd goal "

" It does not matter too much about Middle East tensions and with the control of the Strait of Hormuz there is a risk that this could escalate to a point where 2 million bpd would not be enough "

" In the short-term, however, a busy night on Sunday can be expected, with traders and funds getting caught on the long side. Not least in WTI, where we saw collapse in the last week while the net-long jumped by 25 percent and the long / short ratio hit a 7-year high. "

GIOVANNI STAUNOVO, commodity analyst at UBS [19659004] "While US President Trump's tweet is very clear on how much oil he intends to see from Saudi Arabia, the Saudi Press Agency was more vague – no volume increase reference."

"

" A 2-million-bpd Saudi production increase would move the Kingdom's oil production into an unchartered territory and would wipe out completely the kingdom's spare capacity. "

" Prices "