Saudi Arabia’s Solution to Global Oil Glut: Pump Even More Crude - Bloomberg Business

Saudi Arabia’s Solution to Global Oil Glut: Pump Even More Crude - Bloomberg Business:



"Saudi Arabia has a response to the global surplus of oil: Raise output to near-record levels and then pump even more.



The world’s biggest oil exporter, having abandoned last year its role of keeping global markets in balance, now has incentive to maximize output and undermine rival producers by using its reserve capacity, according to Citigroup Inc. and UBS AG. Just meeting its own domestic demand this summer will require a lot more fuel, others estimate.



The increase -- a snub to fellow OPEC members calling on the kingdom to cut production -- will heighten tensions when the organization meets in June. Oil plunged to a six-year low near $45 a barrel in January, six weeks after the Saudis overcame opposition within the group to keep up output despite surging U.S. shale supplies."



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