Bloomberg
Kuwait City

Saudi Arabia’s crude oil stockpiles fell from a record amid signs that overseas demand for refined products was picking up as margins improved.
Stockpiles dropped to 322.7mn barrels in September from 326.6mn in August, the highest since at least 2002, according to data published yesterday on the website of the Riyadh-based Joint Organisations Data Initiative. Gasoline exports climbed to a record and Saudi Arabia’s own refineries processed 2.5mn barrels of crude daily, an all-time high and up from 2.2mn bpd in August.
Refineries are earning so much money from the low cost of crude and higher selling prices for their products that they are cutting back on maintenance. Plants are usually taken off line for repairs in September and October. Saudi Arabia’s Yasref oil refinery is processing crude at full capacity as margins improved since August, chief executive officer Mohammad Alshammari said last month.
“Refineries at home or abroad seem to be back very fast from maintenance,” Mohamed Ramady, an independent analyst and former economics professor at King Fahad University of Petroleum and Minerals, said by phone from London. “The fastest way to deliver crude to them is from stockpiles.”
Brent crude oil prices dropped 23% this year amid a global supply glut. Brent futures for December settlement climbed 1.7% to $44.31 a barrel yesterday as US industry data was said to show a drop in the nation’s crude stockpiles for last week.
Crude inventories dropped for the first time in four months in Saudi Arabia, the biggest producer in the Organisation of Petroleum Exporting Countries. Its crude exports rose to 7.1mn bpd from 6.99mn in August, according to the JODI data.
“Crude stockpiling can’t go up indefinitely, so at some point some draws have to be made from them to give room for new crude to be stored when needed,” Ramady said.
Saudi Arabia cut oil production in September to 10.23mn bpd from 10.27mn in August, according to the JODI data. The kingdom told Opec that it produced 10.28mn barrels daily in October, which would be the first increase since the record output of 10.564mn in June.
Refined products exports from Saudi Arabia fell in September, to 1.19mn bpd from 1.35mn, according to JODI. Gasoline bucked the trend, rising to a record 206,000 bpd from 200,000 barrels in August. Saudi gasoline production dropped to 529,000 bpd in September from 559,000 barrels a month earlier.
Diesel exports declined to 517,000 bpd in September from 533,000 barrels in August, as production dropped to 1.02mn bpd from 1.03mn barrels, the JODI figures showed.