Is Saudi Output Cut a Response to U.S. Oil Boom?

  • 25 Jan 2013
  • By Petromatrix GmbH
  • Topics: Energy

Reduction a Surprise Given Iran Sanctions

Some want but can't; some can but won't -- This is how we can best describe the current OPEC crude supplies, according to Petromatrix GmbH, a Switzerland-based consultant.

Saudi Arabia's production in December was down about 800,000 barrels compared with the same month in 2011, a decline similar to that of Iran, which has been hindered by sanctions over its nuclear program.

This could be surprising, "given that Saudi Arabia was supposed to be the supply cushion to replace the lost Iranian barrels," Petromatrix said in a recent report. "But it highlights the fact that there is not enough room in global demand to accommodate both an increase of production from other OPEC countries and from the U.S. without a negative price impact."

Saudi Arabia does not like to be described as managing supplies to manage prices, and therefore was quick to explain that the December decline was a function of a seasonal drop in domestic and international demand, and not due to a willingness to control prices. Still, this raises the question of why Saudi Arabia would be cutting output when the world is still trying to enforce tougher sanctions against Iran, Petromatrix said.

Read Full Report

Futures & Options Trading

As the world's leading and most diverse derivatives marketplace, CME Group is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through the CME Globex electronic trading platform and trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort.

Idea Exchange

Idea Exchange is your direct link to the product managers, marketers, and the development teams who create and will allow you to review functionality, participate in focus and provide feedback on upcoming Web initiatives

Idea Exchange - Join Our User Focus Program

Contact Us

CME Group/Chicago HQ:
Local: +1 312 930 1000
Toll Free: +1 866 716 7274

Global Customer Contacts

More CME Group Direct Lines
Phone list by department

Global Partnerships


Global Offices Contact Information

Calgary Houston Chicago New York Washington São Paulo Belfast London Singapore Hong Kong Seoul Tokyo Beijing

© 2014 CME Group Inc. All rights reserved.

CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX, and COMEX.