Saudi Arabia Increased Oil Output Reductions

Saudi Arabia Increased Oil Output Reductions

Saudi Arabia’s Energy Minister, Khalid Al-Falih, said that the Kingdom has reduced oil production to less than 10mb/d, below its targeted level, and will consider renewing its pledge to cut crude output in six months, Bloomberg reported.

This is considered the lowest oil output levels for Saudi Arabia in two years. In addition, Falih, speaking at the Atlantic Council Global Energy Forum in Abu Dhabi, said the Kingdom planned to make even deeper cuts in February, according to Reuters. This means Saudi Arabia has cut oil production by more than the 486,000b/d it agreed to in 2016.

Falih also said he expected the oil market to tighten in two to three years, aided by the agreement between members of the Organization for Petroleum Exporting Countries (OPEC) and non-OPEC producers to curb production. Moreover, Kuwait has also exceeded its targeted cut, according to that country’s oil minister. Algeria’s energy minister said his nation too will reduce output by more than its quota.

Saudi Arabia is due to meet fellow members of the Organization of Petroleum Exporting Countries in May at their bi-annual meeting in Vienna to assess the market and the group’s production policy. OPEC states will also gather with major producers outside the group later January in the Austrian capital to monitor their compliance with the production cuts, which aim at shoring up prices.

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