At the close of market yesterday it had been confirmed that Saudi Arabia would be supplying all its contracted levels of crude to its Asian customers during the course of May. They have been supplying all its nominated crude oil since January apart from April when the volume was 10% lower than expected. In compliance with an OPEC agreement they cut back supply for most of 2009 in an effort to keep oil prices high.
One source has revealed that this is the pattern we can expect to see moving forward for the foreseeable future. There are no planned changes to operational tolerance levels in Saudi Arabia’s production allocation which suggests that suppliers can expect deliveries as normal for May.
The Organization of Petroleum Exporting Countries (OPEC) has not changed its output levels since December 2008 when it announced it that it would be reducing its output levels by a massive 402 million barrels per day. Since then though many OPEC members now appear to be only moderately complying with this rule as Oil prices are now reaching as high as $85 per barrel which is twice what they were at the end of 2008.
Recent analysis of output levels now suggests that more than 10 members of OPEC are now producing more than the targets agreed in 2008. All producers with the exception of Iraq averaged an output level of approximately 24 million barrels per day which estimates that just about half of the agreed OPEC supply cutbacks are now being adhered to.Andrew Reid, Staff Writer, Gulf Jobs Market News