Fuel for Thought

  • Saudi Arabia's Oil Storage Falls to a Two Year Low as Exports Exceed Production

Saudi Arabia's Oil Storage Falls to a Two Year Low as Exports Exceed Production

Aug 15 2016 Read 942 Times

Saudi Arabia may enjoy status as a global oil giant, but that hasn’t allowed it to escape the worldwide price crash. In a bid to ease the sting, the desert country has let its oil storage inventories fall to a two year low, with analysts maintaining that a short-term supply/demand balance is on the horizon. As the interchange plays out, production slumps will tighten global supplies, chew into remaining surplus and ultimately, push up oil prices. It’s a tactical move from the Saudi energy department, yet whether or not it will trigger long-term benefits is yet to be seen.

Six months of decline

As exports exceed production levels, the Arabian Peninsula nation has seen its crude oil storage count drop consecutively for six months. This represents the longest period of decline since Joint Organisations Data Initiative statistics first began, more than 15 years ago. Since October, Saudi oil inventories have contracted by 38.6 million barrels, which puts its total count at a two year low of 290.9 million barrels.

The new Saudi energy minister Khalid Al-Falih stresses that while supplies are shrinking, the end result will be “a balanced market.” In an interview with Bloomberg TV he confirmed that the production halt is a deliberate move, and that Saudi Arabia has “started inventory drawdowns that will continue for the foreseeable future.”

A global oil production embargo

The Saudis aren’t the only ones facilitating a decline in oil storage, with the USA’s count also dropping from 80-year record highs. Since May, national inventories have fallen by over 10 million barrels. Once again, this figure suggests that in the long-run, the oil market could finally be moving towards a supply/demand equilibrium.

“The drop in Saudi crude stocks signals the rebalancing has started,” Amrita Sen, chief oil analyst at Energy Aspects Ltd explained in a recent interview with Bloomberg.

In the wake of ongoing instability, refineries, plants and other downstream facilities must continually search for new ways to cut costs, and boost efficiency. ‘Control Systems Offer Enhanced Operation and Monitoring Functions for Greater Efficiency and Safety’ looks at the innovative new CENTUM VP® R6.02 solution, and its powerful new features including a real-time trend function that allows site managers to actively visualise plant operating status. Other benefits include the ability to seamlessly hand over alarm information, and tightly integrate operations with the latest version of the ProSafe®-RS safety instrumented system.

Read comments0

Do you like or dislike what you have read? Why not post a comment to tell others / the manufacturer and our Editor what you think. To leave comments please complete the form below. Providing the content is approved, your comment will be on screen in less than 24 hours. Leaving comments on product information and articles can assist with future editorial and article content. Post questions, thoughts or simply whether you like the content.


Digital Edition

Petro Industry News November 2018

November 2018

In This Edition Fuel for Thought - VEGA Grieshaber is a TOP innovator in 2018 - Teledyne Technologies acquire Falcon Analytical Systems - Servomex appoints new VP of sales for the Americas...

View all digital editions

Events

Smart Factory Expo (SFE 2019)

Jan 16 2019 Tokyo, Japan

STOC EXPO MIDDLE EAST AFRICA 2019

Jan 16 2019 Dubai, UAE

National Biodiesel Conference + Expo

Jan 21 2019 San Diego, CA, USA

WAIPEC

Jan 23 2019 Lagos, Nigeria

View all events