Saudi Arabia has cut its crude-oil production by at least 486,000b/d since October, bringing the world’s largest exporter of petroleum swiftly into line with OPEC’s deal to raise prices, Oil and Gas People reported.
Saudi Arabia’s crude output fell from a revised 10.60mb/d in November to 10.45mb/d in December. Additionally, Saudi Energy Minister, Khalid Al-Falih, said late 2016 that January oil production could fall below the kingdom’s agreed ceiling.
This came as Saudi Aramco has started talks with customers globally to discuss possible cuts of 3-7% in February crude loadings as it moves to implement an agreement on curbing global oil output, informed Reuters. Accordingly, Saudi oil buyers will be notified by January 10 of their respective crude allocations for February.
Furthermore, Aramco raised the official selling price (OSP) for most of the crude grades it sells to Asia and the United States, but cut prices to Europe. The price of Arab Light crude for Asian customers rose by $0.60/b compared with January to $0.15/b below the Oman/Dubai average. Al-Falih added: “We have done a very high reduction to Aramco’s customers in Europe and the US, and some customers in Asia, which will bring the kingdom’s production below the agreed upon ceiling.”
Late November, the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce production by 1.2mb/d. The kingdom’s leaders had said they would quickly implement their cuts, the biggest of any member in the 13-nation group. With the exception of Iran, Nigeria and Libya, each OPEC member agreed to specific production targets.
