Saudi Arabia has unilaterally slashed its oil production by more than its agreed Opec limit, the kingdom said on Tuesday.
The rare and politically difficult move highlighted the huge losses the Saudis and other oil-producing nations face following the collapse in crude prices as the result of the global economic crisis.
Riyadh’s decision to step outside the group underlines how severely Opec, the oil cartel that supplies about 40 per cent of the world’s oil, is struggling to reverse the slide in oil prices, in spite of the record 2.2m barrel a day cut it announced last month. Oil prices traded on Tuesday at about $39 a barrel, boosted by Saudi Arabia’s decision, but remain well below the kingdom’s $75 target.
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