US, Saudi In Energy Talks As Oil Prices Plunge

The US this week sent a senior energy official to Riyadh for discussions with Saudi Oil Minister Ali Naimi amid conflicting forecasts of impact lower prices will have on US output.

A brief report carried by official Saudi news agency SPA said the discussions held with Deputy US Energy Secretary Elizabeth Sherwood-Randall covered recent developments in the international oil market, as well as possible avenues of cooperation between the two countries in solar energy, the environment, joint investment and technical exchanges. The US official also visited the Saudi Electricity Authority, suggesting the visit was not purely related to oil.

The rapid rise in US crude production, which at 9.2mn b/d in December, is edging ever closer to the kingdom’s current 9.6mn b/d output, has created a rivalry between the political allies. Including around 3mn b/d of NGLs, US output, at 11.6mn b/d for 2014 and 12.3mn b/d for December is already well in excess of Saudi production even if the kingdom’s 1.25mn b/d of condensate output is factored in (see p21). (CONTINUED - 2047 WORDS)


table OPEC Vs IEA Supply-Demand Balance, January 2015 Forecasts (Mn B/D)