01-02-03 With oil prices
holding stubbornly above $ 30 a barrel and Venezuela's oil industry still
constrained by a strike, Saudi Arabia has helped ease a potential supply
shortage by quietly making more crude oil available. Over the past four weeks,
US imports of Saudi crude oil have averaged 1.775 mm bpd, an increase of nearly
20 % since the start of the strike in early December, according to preliminary
US government data. While that number could change with revisions, the data do
point to a trend of rising supply.
"The Saudis definitely helped that way by shipping more," said Jay Saunders, an analyst at Deutsche Bank in New York. If the numbers for Saudi imports survive revision, then the imports over the past four weeks, which don't quite cover January, would be at the highest monthly level since August of 2001. In the four weeks ended Dec. 27, imports of Saudi crude oil averaged 1.64 mm bpd, the highest level for last year, according to preliminary data from the Department of Energy's Energy Information Administration.
The most recent official
EIA data indicate that the US imported 1.474 mm bpd of Saudi crude oil in
November, making it the No. 2 source of US crude-oil imports after Mexico.
Saudi Arabia has long maintained its goal is to stabilise world oil prices. The
kingdom's relationship with the US, the world's leading oil consumer, has come
under pressure since the September 11 attacks.
Saudi Arabia played a leading role in the OPEC's decision last month to hike output quotas by 1.5 mm bpd beginning Feb. 1. At this point, Saudi Arabia is the only OPEC member with enough capacity to substantially raise production. A Saudi adviser said that the kingdom has raised its crude oil production nearly 9 mm bpd -- about 1 mm barrels more than its official allocation under OPEC's quota system -- to make sure there is enough oil in the market.
The increased production is
meant to allow refiners to replenish their stocks, the adviser said. Refiners
have been drawing down stocks rather than buying crude at high prices. Oil
prices in New York have risen by 26 % since the strike in Venezuela began and
are 77 % higher than their level a year ago. Saudi officials say there is no
shortage of oil and that prices have risen on Iraq war fever.
"I checked with individual customers, refineries and others. I ask them one question: Do you feel you need more oil? And the answer is no," Saudi Oil Minister Ali Al Naimi said. "There is always doubt that we will deliver," he said. "But fortunately, history is on our side."
Some industry observers
agreed the shortage had eased, and largely credited the Saudis. "There is
a significant volume of coming our way," said Sarah Emerson, an analyst
with Energy Security Analysis. "I think the Saudis have helped us bridge
the supply gap."
Stuart of ABN Amro said the Saudis have boosted supply to the US by tapping storage they control. The move has helped "soften" supply-demand fundamentals in the US market, as indicated by weaker prices on the physical market, he said. "Right now, there is no shortage of oil," Stuart said. "You can see that in the physical market."
The incremental Saudi barrels have helped pick up the slack, but have not fully offset the loss of Venezuelan oil, Saunders of Deutsche Bank said. As a result, imports of crude oil have remained relatively low, he said.