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Too much oil on the market, but investments in the industry needed



Right now Saudi Arabia’s oil production capacity is at about 12.5 million barrels per day.



07.Jun.16 2:01 AM
By Vladimir Vasiliev
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Too much oil on the market, but investments in the industry needed
That is the point of the Saudi Arabia’s energy minister Khalid al-Falih, which he said about in Vienna where OPEC ministerial meeting began.

Right now Saudi Arabia’s oil production capacity is at about 12.5 million barrels per day. Seems like Saudis are not going to reduce that level. Minister said that if you do not invest it will start to decline.

In April the kingdom pumped 10.18 million b/d. That means that Saudis currently have at about 18-19% of the spare capacity. According to the minister’s words that is their policy of doing so. There is no information about how long would it take to get the maximum level of pumping or about how long the production capacity could be maintained without investment.

According to some sources Saudis are able to increase production capacity up to 20 million b/d and that makes some of the oil exporters a little bit nervous, due to the fact that now supply expansion exceeds the demand growth. Surely that is if the kingdom chooses to invest heavily in the industry.

For now, Saudis declare that the market needs to be adjusted to the current situation though they are ready to meet customers demand whether the oil prices are high or low.



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