Published: Wed, October 24, 2018
Markets | By Noel Gibbs

Saudi Arabia ready to boost oil output, spare capacity

Saudi Arabia ready to boost oil output, spare capacity

Brent crude futures LCOc1 dropped 2.8 percent, or $2.27, to $77.56 a barrel by 11:21 a.m. EDT (1521 GMT) after plunging to $77.50, the lowest since September 18.

Trying to dismiss such worries, Saudi Energy Minister Khalid al-Falih said on Monday that "there is no intention" for such action, and that Saudi Arabia would play a "constructive and responsible role" in world energy markets. He added there is NO guarantee that oil prices would not go higher once anti-Iran sanctions come into force next month.

Iranian oil minister says sanctions won't stop them from exporting oil.

"Then we will continue with the mindset we have now, which is to meet any demand that materialises to ensure customers are satisfied", Falih said.

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Mr Falih added that Saudi Arabia will raise oil output to 11 million barrels per day from 10.7 million. The chief executive of Saudi Aramco, Amin Nasser, said it would take the kingdom only three months to reach its maximum production capacity of 12 million bpd if needed.

Meanwhile, Iran's oil minister Bijan Zanganeh has said that Saudi Arabia and Russian Federation can not replace Iran' oil as the production capacity of the two countries has reached its peak.

There are limits to the kingdom's ability to respond, Al-Falih said. Saudi Arabia said last week it would retaliate against any punishment for the killing.

Meanwhile, Russia's oil production is now 150,000 bpd higher than the October 2016 level, the baseline for the global oil production deal, TASS news agency quoted Energy Minister Alexander Novak as saying.

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Meanwhile, Russia's oil production is now 150,000 bpd higher than the October 2016 level, the baseline for the global oil production deal, TASS news agency quoted Energy Minister Alexander Novak as saying.

In a column published last week, Saudi-owned Al Arabiya channel's General Manager Turki Aldakhil warned that imposing sanctions on Riyadh could spark global economic disaster as oil could jump to $200 per barrel.

"This heavy attendance of worldwide leaders in the field of oil and gas today is proof of the great trust in the Kingdom's status", Falih said.

The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EDT.

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