Naimi says country produced at 10.3m barrels per day in March.
If Saudi Arabian oil production in March matched estimates from oil minister Ali Al-Naimi, it will have been a record month for supply. He spoke with reporters and talked about higher prices and vaguely hinted at supply cuts (if everyone participated, which is not going to happen).
Then he slipped in a bombshell: the Saudi's produced 10.3 million barrels per day in March. If confirmed it would break the record set in August 2013 of 10.24 mbpd.
A Reuters survey earlier in the month estimated Saudi production just below 10 mbpd. At this time last year, which was the relative salad days for oil prices, the Saudis were producing 9.69 mbpd. Even in December production was at 9.64 mbpd.
Saudi oil production
Meanwhile, the oil market is has been in the midst of an epic rally with WTI hitting $54 into settlement, up another 3.5% after a 6% rally on Monday.
The rally in oil today comes despite the US EIA warning that Iran has at least 30 million barrels of oil in storage and could increase production by 700K bpd if sanctions are lifted. They estimated it could hurt prices by $5-15 per barrel.
Goldman Sachs analysts, meanwhile, were doing the rounds saying that slower US production could give a mild boost to prices in the near term but it remains insufficient to balance the market.
The next main event for crude is the release of API inventory data at 4:35 pm ET (4:30 pm for subscribers). Analysts are looking for something around a 3.3 million barrel build.
The bullish case:
Everyone is looking for declines. That's it.
Some of the greatest market moves are built on disbelief and you don't have to look any further beyond the drop in oil prices in 2014 to see that. The EIA also said US production would rise just 550K bpd this year compared to 700K bpd expected previously.
If the Feb high of $54.24 gives way, this squeeze higher could turn from painful to downright ugly.