RIYADH: OPEC kingpin Saudi Arabia said Wednesday it would slash its oil exports by 800,000 barrels per day in January and promised further cuts as producers move to shore up tumbling prices.
Energy Minister Khalid al-Falih said the kingdom, the world’s top crude supplier, would cut its exports to 7.2 million bpd in January, down from 8.0 million bpd in November.He also announced a further 100,000 bpd cut in February, reports AFP.
Benchmark Brent crude climbed back to $60 per barrel on Wednesday for the first time in several weeks following the Saudi announcement, which came as producers began implementing a new deal to trim output.
OPEC and its allies decided last month to cut their overall output by 1.2 million bpd from January, to boost prices hit by a supply glut and fears demand could plummet.
Falih said Saudi production had fallen to 10.2 million bpd, down from the roughly 11 million bpd it was pumping when oil producers decided to end a production cut deal in May.
“We are serious about restoring balance to the market,” Falih told a press conference in Riyadh.
“We are concerned about volatility in the oil market,” he said. “We have seen peaks and drops in prices (that are) completely unjustified by the fundamentals.”Brent crude had hit $85 a barrel in early October, but prices dived more than 40 percent over the following two months on oversupply and fears a trade war between the United States and China could slash demand.
They have partially rebounded in the past few days after a new deal came into effect, under which OPEC and non-OPEC oil producers agreed to trim output by 1.2 million bpd.
That figure is “more than sufficient to bring balance to the market,” said Falih, adding that the production cut would trim excess supply.
Members of the Organization of the Petroleum Exporting Countries and their partners, who together account for around half of global output, have presided over a supply glut which had sent oil prices tumbling by more than 30 percent between October and December.