Saturday , April 17 2021

Saudi Arabia calls for a reduction in world oil production by one million barrels per day Economic America



Saudi Energy Minister Jaled al Faleh said Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies had agreed to reduce oil supplies by 2019 to around one million barrels per day to balance the market.

"The technical analysis that we reviewed yesterday (this week) shows us that we need a reduction of around one million barrels per day to balance the market," the head of state at the conference in Abu Dhabi, according to Saudi Arabian channel Al Arabiya.

This week, Faleh announced that the Saudi kingdom would reduce its own production, on the sidelines of a meeting of ministerial committees that monitor oil production from the largest producers, including Russia and the Organization of Petroleum Exporting Countries (OPEC). . This will have consequences, in December 2018, a decline in exports of 500,000 barrels per day, in relation to November.

"OPEC may need to cut production, because the oil market can see excess supply next year," Faleh said.

"OPEC may need to cut production, because the oil market can see excess supply next year," Faleh said.

Despite not issuing recommendations in this regard, the ministerial committee coincided with the analysis of the Saudi minister. In a statement, he said he expected global oil production to increase in 2019 and that slowing global growth could affect demand.

The world crude oil supply was reduced by 0.5%. Before the meeting of the 25 OPEC countries and non-OPEC countries on December 6 and 7 in Vienna, technical experts would analyze the possible scenarios related to "options for new adjustments for production in 2019, which could require new strategies to balance the market," the committee added that.

The cuts announced by the Saudi will reduce the global supply of crude oil by almost 0.5%, according to OPEC information. In October, Saudi Arabia increased its oil production by around 10.7 million barrels per day, compared with 9.9 million barrels in May.

Today's meeting took place in the context of the decline in crude oil prices, which renewed fears of a 2014 collapse.

In recent months, US President Donald Trump has pressured oil producers such as Saudi Arabia to increase production so prices remain low.

Trump considers that, because of his campaign against Iran, which includes new sanctions, there will be less oil available on the global market.

That is why he is asking OPEC to make a difference. In essence, concerns about a possible lack of supply were lost after Washington announced last week that it would allow several countries, including China, Japan, India and South Korea, to continue buying Iranian crude despite the embargo. Iran is a regional rival of Saudi Arabia and both are members of OPEC.


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