Saudi Arabia reduced its crude oil production by 111,000 bpd to 9.9 million bpd in March, again generously overcomplying with the OPEC output cut deal after having raised February output—but still below the ceiling it had pledged—in order to fill storage tanks.
According to a person familiar with Saudi Arabia’s output data for March, the Kingdom reduced its production last month to the lowest level since January, when the OPEC/non-OPEC deal started, Bloomberg reported on Tuesday.
Mohamed Ramady, an independent oil analyst told Bloomberg from London:
“The Saudis are more than fully complying with the deal. This is good news for the market and prices.”
OPEC’s biggest producer and de facto leader Saudi Arabia, which had promised to curtail its output to 10.058 million bpd between January and June, signaled to the markets as early as in January that it had pared production back to below 10 million bpd, the lowest level since February 2015.
Saudi Arabia’s overcompliance pushed up oil prices up for a few weeks earlier this year, and was the main driver behind the surprisingly high compliance rate—more than 90 percent—that OPEC has been boasting since the start of the deal.
While OPEC’s secondary sources placed Saudi Arabia’s February crude output further dropping from January to 9.797 million bpd, the Saudis self-reported output was back to above 10 million bpd – still cutting deeper than promised in the deal – but easing curtails. According to the figures the cartel members provide to OPEC, Saudi Arabia’s output jumped by 263,300 bpd to 10.011 million bpd, although still below the 10.058 million bpd ceiling. Related: Venezuela Is The Wild Card In The OPEC Deal Extension
The market grew jittery on speculation that the Saudis were done making up for its less-compliant members, although Saudi Arabia’s Energy Ministry said that the higher output in February was only moved into storage, and that supply to the market dropped by 90,000 bpd to 9.9 million bpd.
Official figures on output by Saudi Arabia and the cartel are expected on Wednesday, April 12, when OPEC will release its Monthly Oil Market Report with data for March.
By Tsvetana Paraskova for Oilprice.com
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