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Saudi Arabia Can Raise Output 25% If Needed, Naimi Says

Ayesha Daya, Bloomberg
Saudi Arabia (OPCRSAUD) can increase crude production by as much as 25 percent immediately if needed, the country’s oil minister said, seeking to allay the concern over supplies that has driven prices to the highest in three years…

The global market is oversupplied by as much as 2 million barrels a day and inventories are rising, the minister said. Stockpiles in nations belonging to the Organization for Economic Cooperation and Development, were at 58.5 days worth of consumption last month and may reach 60 days this month, the Saudi minister said…

Oil supply disruptions in Yemen, Sudan and Syria are located in “miniscule” producers and total no more than 500,000 barrels a day, al-Naimi said. At the same time, OPEC members are boosting capacity. Libya will probably restore daily output to about 1.7 million barrels “very soon” and Iraq has commissioned facilities to export 900,000 barrels, he said.
In addition, Saudi Arabia’s overseas crude tanks are full and total about 10 million barrels, while local stockpiles are “significantly higher,” he said…
(20 March 2012)

Tech Talk – Going Back to the First Look at Saudi Arabian Oil Production

Heading Out, The Oil Drum
The United States Government has just asked the Kingdom of Saudi Arabia (KSA) to raise the levels of its oil production in summer 2012. Oil production is otherwise anticipated to be at some 9.8 mbd this summer, with fluctuations of around 200 kbd about that number. (There are rumors it has just hit 10 mbd.) It is reported that the KSA could raise production to 12.5 mbd if needed. Saudi Oil Minister Ali al-Naimi has now stated that the KSA is able to meet that commitment.

Since I started writing about peak oil back in 2005, the possible maximum sustainable production achievable from the Kingdom has been one of the recurring issues at The Oil Drum, and there have been a number of very perceptive analyses carried out by folk such as Euan Mearns, Stuart Staniford, and JoulesBurn that I do not intend to try and surpass. I will, however, try to summarize some of their conclusions as I work through a few posts that look at the overall production from the various fields that are found both on and offshore Saudi Arabia.

As an initial point, not all the oil that comes from the country is of the same quality, and this is often one of the initial factors that folk do not appreciate when they look, for example, at the two numbers I gave above, that which the KSA is producing, relative to that which it might be able to achieve. The problem arises with the heavier crudes that make up a part of the surplus, for which there is not a great market, as yet. So let me begin the review this week by simply taking an overall view of the country, the oilfields that comprise regions of major production, and what sort of oil KSA is producing…
(19 March 2012)

Saudi Arabia sends tankers to US with pledge to bring down oil price

…Saudi Arabia has reportedly hired 11 supertankers capable of carrying 2m barrels of oil each in the last few days, which will set off for US ports in the Gulf of Mexico in the next few weeks.

That compares to the one supertanker every two months sent to the US from Saudi last year, the Financial Times reported…

The International Monetary Fund (IMF) has also warned that surging oil costs pose a serious risk to the global economy, threatening to smother expansion before a fresh cycle of growth is safely under way.

“The world is not yet out of the danger zone,” said Christine Lagarde, the IMF’s managing director, speaking in Beijing at the weekend. “The rising price of oil is a new threat that could derail the recovery. I think it is a major threat.”…
(20 March 2012)

FACT CHECK: Does more US drilling ease gas pump pain? Math, history show that hasn’t happened

Jack Gillum, Seth Borenstein – AP, Chicago Tribune
It’s the political cure-all for high gas prices: Drill here, drill now. But more U.S. drilling has not changed how deeply the gas pump drills into your wallet, math and history show.

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump…
(21 March 2012)

Tapping Petroleum Reserve has gotten trickier

The Strategic Petroleum Reserve is not quite as strategic as it used to be…

Moving to tap the four giant Gulf Coast salt caverns that hold 700 million barrels of government-owned crude would still almost certainly knock global oil futures lower, delivering some relief at the pump for motorists and helping Obama in the November election if he can prevent gasoline from rising above $4 a gallon nationwide…

But the logistics of getting that crude oil to willing refiners are more complicated than ever.

The reversal of a major Texas-to-Oklahoma pipeline will lower the distribution capacity of the SPR’s largest cavern, according to John Shages, who oversaw the oil reserves during the Bush and Clinton administrations. A resurgence in domestic oil output and the potential closure of the East Coast’s biggest refinery is curtailing demand for crude…
(18 March 2012)

US exempts Japan and EU nations from Iran oil sanctions

BBC Online
The US government will not impose sanctions on Japan and 10 European Union nations that have reduced their oil imports from Iran.

Ordered by Congress in December, the sanctions aim to punish countries that continue to buy oil from Iran.

China, India and South Korea, major buyers of Iranian oil, were not exempt.

Iran faces international pressure to address concerns over its nuclear enrichment programme.
(21 March 2012)