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Saudi Arabia will cut oil production in June by 1 mi bpd

Posted by Marina

Saudi Arabia has ordered state-owned oil company Aramco to cut oil production in June by 1 million barrels a day, in voluntary cuts that will add to supply reductions already agreed under an OPEC + agreement, said a representative from the Ministry of Energy of the kingdom this Monday.

"This brings the total production cut that will be carried out by the kingdom to around 4.8 million barrels per day, in comparison with the level of production in April," said the government representative.

"With that, the production of the kingdom in June, after the cuts in its target and the volunteers, will be 7.492 million barrels per day," he added.

Oil prices, which were falling, briefly started to rise with the news, but then went back into negative territory.

Global demand for oil has dropped by about 30% as the coronavirus pandemic has created limitations on the movement of people around the world, reducing fuel use and increasing oil stocks.

The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC +, struck a deal last month to cut production by 9.7 million barrels a day in May and June, a record cut. Producers are expected to slowly relax the cuts after June, but restrictions are expected to continue until April 2022.

Under the agreement, Saudi Arabia aims at oil production of 8.492 million bpd in May and June.

The ministry also asked Aramco to reduce production in May from its quota level, "in consensus with customers".

"The kingdom aims, with these additional cuts, to encourage OPEC + participants, as well as other producing countries, to comply with the production cuts to which they have committed, and to ensure additional voluntary cuts in an effort to support the stability of global global markets. oil, "said the Saudi government representative.

Source: Notícias Agrícolas