Saudi Arabia is trying to support oil prices by reducing its crude shipments to the United States in a bid to cut the amount of oil in commercial storage. US crude imports from Saudi Arabia averaged less than 900,000 barrels per day (bpd) in the four weeks ending on July 7, according to the U.S. Energy Information Administration. US imports from Saudi Arabia are running at the slowest rate since 2015, and the slowest for the time of year for over five years. Imports from Saudi Arabia will fall even further to less than 800,000 bpd in August, according to a Saudi industry source familiar with the kingdom's oil policy.
"Saudi Arabia is keen to see an improvement in the oil market and accelerate the balancing process," the source told Reuters on Wednesday ("Saudis to cut August oil exports to lowest level this year", Reuters, July 12). Saudi Arabia is cutting exports to all destinations but reducing shipments to the United States is especially important because US stocks are the most visible and have the biggest impact on prices.
The United States accounts for more than 40 percent of the commercial crude and product stocks held in the OECD and its stocks are reported weekly rather than monthly as in most other countries. US crude and product stocks therefore receive disproportionate attention from oil traders and analysts, and can have a major impact on global oil prices. Changes in US crude and products stocks are often interpreted to reflect changes in the global supply-demand balance.
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