Saudi Arabia to keep scaling back production and exports

Saudi Arabia to keep scaling back production and exports
Ongoing oil supply cuts have so far helped support oil prices above $60 a barrel.
Published: 15 March 2018 - 1:19 a.m.
By: Jonathan Sheikh-Miller

Saudi Arabia is to maintain its crude oil output next month below 10mn barrels per day (bpd), and maintain its exports at under 7mn bpd to target global surpluses and to support prices, according to an Energy Ministry statement cited by Reuters.

 “Despite nominations coming in at 100,000 barrels a day, higher than the previous month, allocations were maintained on par with their March levels,” the ministry stated.

A spokesman for the ministry, quoted by the news agency, said the kingdom, along with the OPEC and non-OPEC oil producers collaborating in a global supply reduction deal which has scaled back output by 1.8mn bpd, “remain committed to pursuing the common objective of restoring inventories back to their normal levels.”

The OPEC and non-OPEC producers, led by Russia, have pledged to pursue oil output cuts until the end of the year.

OPEC has focused on the five-year average as a marker and thus far has managed to bring the surplus down to around 74mn barrels above that indicator, from over 300mn when cuts commenced in 2017.

OPEC has succeeded in meeting more than more than 100% of the output cuts agreed under the deal, according to its own data, partly due to the economic crisis and production outages in Venezuela.

“We are happy with the excellent overall conformity levels and look forward to all participating countries maintaining or exceeding full conformity with their commitments as agreed,” the Saudi energy ministry spokesman said.

Brent crude is currently trading at just under $65 a barrel down from three-year highs achieved in January.

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