Saudi Arabia May Raise Oil Output if Prices Hit $120/bbl - SocGen

Saudi Arabia may seek to raise oil production if prices hit $120/bbl, Mike Wittner, Head of Oil Research at Societe Generale says in a report. "I think that around $120, the Saudis start to worry a lot about whether prices are "too high" and could possibly hurt the global economy and ultimately hurt oil demand," Mr. Wittner said.

Saudi Arabia currently produces around 10 million barrels of crude oil a day, and has a total producing capacity of 11.5 million bbl/day, that may potentially be raised to 12.5 million with further investment. Mr. Wittner says spare capacity is one of the key metrics in the oil markets and after Saudi Arabia raises capacity to offset supply disruptions, the market will immediately focus on the spare capacity left and that's bullish.