Saudi Arabia’s power sector is having to burn more liquids as Opec output restrictions crimp associated gas production. But within this, a sizeable structural shift is developing as crude oil burn declines and fuel oil consumption gallops ahead.
Saudi Arabia has kept crude production well below its Opec allocation of 10.31mn b/d this year. Production averaged 9.96mn b/d to April according to the Opec secondary sources aggregate and fell further to 9.90mn b/d for May. Heading into the hottest summer months when electricity demand peaks, current production of around 9.70mn b/d is down some 300,000 b/d year-on-year and that will be having a notable impact on gas output. (CONTINUED - 1045 WORDS)