Saudi Arabia revises upward proven oil & gas reserves

Lloyd Doyle
January 12, 2019

Saudi Arabia is planning to lower its crude oil exports to around 7.1 million barrels per day (mbpd) by the end of January to help boost oil prices above $80 a barrel, The Wall Street Journal reported OPEC officials as saying on Monday.

However, it is unclear to what extent the talks with China and al-Falih's remarks will keep the market buoyed, especially given the U.S. Energy Information Administration reporting that the nation's inventories of gasoline rose by 8.1 million barrels and distillates stockpiles (including diesel and heating fuel) jumped by 10.6 million barrels (crude stockpiles fell by 1.7 million barrels).

"Oil has had a good rally as Saudi Arabia's willingness to move forward with cutting output was clearly delivered to the market", said Hong Sungki, a commodities trader at NH Investment & Securities Seoul.

Further easing concerns of global oversupply, U.S. commercial crude oil inventories decreased by 1.7 million barrels from the week ending January 4, the U.S. Energy Information Administration reported on Wednesday, which marked the biggest fall since November 2018.

The most recent market rumors have had it that Aramco could fund the entire US$70-billion price tag for buying 70 percent in Sabic with the upcoming bond issue.

Addressing a press conference on Wednesday, Minister Khalid al-Falih said that the latest audit "confirms our belief that Aramco is the most valuable company in the world".

Members of the Organisation of the Petroleum Exporting Countries and their partners, who together account for around half of global output, have presided over a supply glut which had sent oil prices tumbling by more than 30 per cent between October and December.

Leading consultants DeGolyer and MacNaughton (D&M) conducted the independent certification.

The kingdom has another 2.9 billion barrels of crude in a border zone shared with neighbouring Kuwait, bringing total oil reserves to 266.1 billion barrels, the ministry said.

Saudi Arabia's reserves of easily recoverable oil have always been the world's largest but few details were public. Falih said on Wednesday the kingdom would still go ahead, and list the company by 2021. "But the trade negotiations between the US and China still add some uncertainty to global financial and oil markets, possibly leading to corrections in prices in the shorter term".

Other reports by Iphone Fresh

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