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Saudi pledges voluntary oil output cuts in Feb-March as part of OPEC+ deal

Saudi Arabia pledged additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady

Topics
Saudi Arabia | OPEC output | Global oil output cut deal

Reuters  |  MOSCOW/LONDON 

Crude oil
Crude oil pump jack

By Vladimir Soldatkin, Shadia Nasralla and Alex Lawler

MOSCOW/LONDON (Reuters) -will make additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns.

Saudi is going beyond its promised cuts as part of the OPEC+ group of oil producers to support both its own economy and the oil market, Minister Prince Abdulaziz bin Salman said on Tuesday.

The move follows two days of talks among OPEC+ producers that will see most members hold output steady next month.

Two producers - Russia and Kazakhstan - will be allowed to bump up their output by a combined 75,000 bpd in February and a further 75,000 bpd in March, Kazakhstan's minister said.

Benchmark Brent oil was trading up about 5% at more than $53 per barrel at 1836 GMT. [O/R]

 

DEBATE

Russia and Kazakhstan had pushed for the group to raise production by 500,000 barrels per day (bpd) for February, as it had done for January, while others wanted no increase.

An internal OPEC+ document dated Jan. 4 seen by Reuters highlighted bearish risks and stressed that "the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021".

Saudi's minister on Monday urged caution, noting still fragile fuel demand and the unpredictable impact of new variants of the coronavirus.

New variants of the coronavirus first reported in Britain and South Africa have since been found in countries across the world.

OPEC+ producers have been curbing output to support prices and reduce oversupply since January 2017.

As COVID-19 hammered demand for gasoline and aviation fuel and slashed Brent oil prices, OPEC+ was forced to boost its output cuts to a record 9.7 million bpd in mid-2020.

This month's 500,000 bpd rise in output narrowed OPEC+ cuts to 7.2 million bpd.

 

 

(Reporting by Alex Lawler and Ahmad Ghaddar in London, Rania El Gamal in Dubai, Vladimir Soldatkin and Olesya Astakhova in Moscow; writing by Dmitry Zhdannikov; editing by Jason Neely)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, January 06 2021. 06:18 IST
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