Saudi Arabia has cut oil output to its lowest in almost two years. Saudis Pledge Even Deeper Oil Cuts in February Under OPEC deal. Saudi Arabia will pump oil for six months at levels “well below” the voluntary production limit it accepted under OPEC’s oil-cuts accord, Energy Minister Khalid Al-Falih said.
Energy Minister Khalid al-Falih said output had fallen below 10 million barrels per day. Saudi Arabia expects to reduce oil output once again in February and pump for six months at levels “well below” the production limit it accepted under OPEC’s oil-cuts accord.
Al-Falih said in a Bloomberg Television interview. Saudi Arabia has cut oil production by more than the 486,000 bpd it agreed to late last year under a global deal to curb production and stem a fall in oil prices. OPEC expects global oil inventories to fall by the second quarter of this year in response to the agreement.
Kuwait has cut its oil exports by more than 133,000 bpd mainly to customers in North America and Europe while maintaining full exports to Asia. Oil prices inched up on Wednesday after China said it would raise spending to stem an economic slowdown that has been weighing on financial markets.
OPEC and non-OPEC producers last month reached their first deal since 2001 to curtail oil output jointly by nearly 1.8 million bpd to help stem a fall in oil prices and ease a supply glut. Oil producing states in OPEC and beyond are going to prevent a buildup of global crude inventories in the first half of this year.
“The world’s biggest exporter targeted production of 10.2 million barrels a day in January and is aiming to pump about 10.1 million in February”, Energy minister said.
The impact of the reduction will trickle down into the global markets over the next few weeks. Falih also said he expected the oil market to tighten in two to three years, aided by the agreement of OPEC and non-OPEC producers late last year to curb production.
Saudi Arabia’s voluntary limit under the December cuts deal with Russia and other producers was 10.33 million barrels. Benchmark Brent has gained 12% this year. Saudi Arabia and like-minded countries are determined to drive inventories below the five-year historical average, Al-Falih said.