Saudi Arabia Leads OPEC October Output Hike?

Analysts were undecided on whether Saudi Arabia, and OPEC as a whole, had increased or decreased their oil output.

Bunker buyers watching the key oil market drivers Friday received mixed signals as October all but drew to a close, with analysts undecided on whether Saudi Arabia, and the Organization of the Petroleum Exporting Countries (OPEC) as a whole, had increased or decreased their oil output.

Bloomberg data indicated Saudi Arabia lifted output by 80,000 barrels per day (bpd) month-on-month to 10.38 million bpd, with OPEC's net output for the month rising 74,000 bpd to 32.211 million bpd.

"This data shows that the battle for market share is far from over," commented John Kilduff, partner, Again Capital LLC.

"There's a complete lack of coordination and cooperation among the group's members."

However a Reuters survey Friday suggested OPEC supply for the month fell to 31.64 million bpd lead by a slide in Saudi output to 10.10 million bpd.

"Supply to the market is down," an unnamed source was quoted by Reuters as saying.

"Exports are up but this has been more than offset by lower refinery runs due to maintenance and lower direct burn."

What is not disputed, however, is that output to an already oversupplied market is close to an all time high.

While this translates into ship operators enjoying a sustained period of low prices now, struggling dry bulk and box shippers in particular should be mindful that a longer period of higher prices, in conjunction with the likely need to burn a fundamentally more expensive product courtesy of the upcoming 0.5 percent global sulfur cap, might not be too far away.

"Clearly, OPEC's long-game strategy is working," said Harry Tchilinguirian, global head of commodity strategy, BNP Paribas.

"In the end, OPEC's strategy is creating the conditions for higher prices for longer in a couple of years' time."

In September the International Energy Agency (IEA) said OPEC will be the winners of the current price war.