• Wednesday, May 29, 2024
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BusinessDay

Saudis to maintain oil output after biggest cut since ’12

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Saudi Arabia, the largest crude producer in OPEC, plans to keep output steady until the end of the year after making the biggest cut in 20 months in August.

Output through the end of the year won’t differ much from August, when the country pumped 9.597 MMbopd. The nation reduced production by 408,500 bopd last month, the most since December 2012, according to its most-recent submission to the Organization of Petroleum Exporting Countries.

Oil demand growth was the weakest since 2012 in the second quarter and industrialized nations’ stockpiles in August rose by more than twice the normal amount for the time of year, according to the International Energy Agency. Brent, the world’s most-active crude contract, is close to a two-year low. OPEC may cut its output target next year, the group’s secretary general said September 16.

Brent for November settlement is heading for a weekly loss falling 1.4 percent since September 19 to $96.97/bbl.

OPEC’s daily output target could fall by 500,000 bbl to 29.5 MMbpd in 2015, Abdalla El-Badri, the group’s secretary general, said at its secretariat in Vienna. OPEC’s September monthly report showed demand for its oil will drop to 29.2 MMbpd in 2015 from 29.5 MMbpd this year.

Oil inventories in developed countries rose by 19.2 MMbbl in August, the IEA said. Second-quarter demand growth fell to 480,000 bpd, compared with a year earlier, the first time in about two years that it has been below 500,000 bpd, the IEA said.