Saudi Arabia pumps 12m barrels of oil for the first time

The Kingdom’s previous record output was about 11 million barrels, achieved only briefly. (Reuters)
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Updated 02 April 2020

Saudi Arabia pumps 12m barrels of oil for the first time

  • Daily record smashed amid market turmoil
  • Previous record output was about 11 million barrels

DUBAI: Saudi Arabia pumped more than 12 million barrels of oil on Wednesday for the first time in its history.

The Kingdom has vowed to ramp up production as an oil “price war” shakes the global energy industry following the end of a supply agreement with other producers.

Officials at Saudi Aramco, the world’s biggest oil company, and the Saudi Ministry of Energy, Industry and Mineral Resources told Arab News that crude output on the first day of April — when the OPEC+ agreement to limit supply lapsed — was more than 12 million barrels. Some reports put it at 12.3 million.

The Kingdom’s previous record output was about 11 million barrels, achieved only briefly.


SPOTLIGHT: From Middle East to USA, coronavirus impact transforms oil industry’s dynamics


Aramco had pledged to increase its maximum sustainable capacity (MSC) — the level at which it can safely maintain long-term output — to 12.3 million in the coming months; that it has already hit this level is regarded as a measure of its operational efficiency and the Kingdom’s determination to win the battle for market share.

The company released a short video showing laden oil tankers sailing away from Saudi ports. It said it had loaded 18.8 million barrels onto 15 tankers, which would have taken about three days.

 

 

Aramco’s strategy of large output increases and significant discounts to customers — labeled a “shock and awe” play by energy experts — has transformed the oil industry. The price of crude oil plunged as demand for energy was hit by the coronavirus pandemic. Some producers, especially in the US where extraction costs are high, are facing financial disaster.

“If Saudi Arabia sustains this, it would be an unprecedented demonstration of their MSC,” said Robin Mills, chief executive of the Qamar energy consultancy. “Assuming that it is production, and not just drawing down on storage, it’s an impressively quick ramp-up.”

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It was also notable that production was unaffected by any lingering issues from terrorist attacks last September on Aramco facilities at Abqaiq and Khurais, Mills said.

Despite the flood of oil onto global markets, the Brent crude global benchmark price rose by about 10 per cent toward $25 per barrel after US President Donald Trump said he thought the price was too low, and offered talks with Saudi Arabia and Russia about the global oil glut.

Shares in Saudi Aramco rose for a third consecutive day, up 1.5 per cent to SR30.6.


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.