Saudi Arabia is seriously trying to talk down the oil market. But in doing so, it is setting the stage for another oil price rally. Ali Naimi, the kingdom’s oil minister, has revealed that Saudi Arabia sharply reduced sharply its oil production last month – by a hefty 800,000 barrels a day – because of lack of demand.
“Our production in February was 9,125,100 barrels per day,” Mr Naimi said. “In March, it was 8,292,100 b/d. It will probably go a little higher in April. The reason I mention these numbers is to show you the market is oversupplied,” he said in Kuwait City ahead of an industry conference.
The disclosure – extremely rare because of its level of detail – has been largely overshadowed by other events, notably Standard & Poor’s announcement that it was cutting its outlook on US sovereign debt for the first time. But it matters, because it suggests that the Opec oil cartel is producing at its lowest level since two years ago, when the global economy was still emerging from its worst economic recession since the 1930s.
No comments:
Post a Comment