Saudi Arabia has retaken the position of the world’s top oil producer from the US, according to the International Energy Agency.
“Saudi Arabia’s elevated oil production has allowed it to overtake the US and become the world’s largest oil producer,” the Paris-based IEA said in its monthly report on Tuesday, Bloomberg reported.
While Saudi Arabia has added 400,000 barrels a day of output from low-cost fields since May, about 460,000 barrels a day of “high-cost” production has been shut down in the US. America has been the world’s largest producer of crude and other liquid hydrocarbons since April 2014 following the shale oil boom.
US output in August stood at 12.2 million barrels a day, including natural gas liquids, according to the IEA. The drop in US production came as the number of rigs drilling for oil and gas fell to a record low of 404 on May 20, according to data from Baker Hughes Inc. That number has since recovered to 508 as of Sept. 9.
Saudi Arabian crude supply climbed to 10.65 million barrels a day in July, before easing to 10.6 million in August. Production has averaged 10.36 million barrels a day in the first eight months of this year, almost 200,000 barrels a day higher than the year-earlier period. The IEA did not give a figure for Saudi production of natural gas liquids.
Global oil demand growth is slowing at a faster pace than first thought, IEA said in its latest market update, warning that markets would have to wait "a while longer" to rebalance.
"Global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 million barrels a day is expected," the IEA said in its September report published on Tuesday, equating to a downgrade of 100,000 barrels a day from its previous forecast.
The downgrade was "due to a more pronounced slowdown" in the third quarter of 2016, it said before forecasting a further slowing next year. "Momentum eases further to 1.2 million bpd in 2017 as underlying macroeconomic conditions remain uncertain."
The predictions will be worrying for oil markets at a time when a delicate rebalancing of supply and demand is hoped to be taking place. Oil prices have dropped steadily since mid-2014 on the back of a glut in global oil supply and the failure of demand to keep pace.
