Decision to improve the oil industry situation… Expectations to improve market responsiveness
OPEC+ shows surprise in oil producing countries, Russia also praised’great dedication’
[에너지신문] Overturning market expectations that OPEC+, which has continued to discuss the scale of production cuts in February, will only maintain the current cuts, Saudi Arabia announced an additional single-million-barrel cut-off in two months.
Saudi Energy Minister Abdulaziz bin Salman announced that Saudi Arabia’s crude oil production for February and March will be maintained at 81,19,000 barrels, which is one million barrels less than the production cut-off quota of 9,190,000 barrels.
Regarding these measures, Saudi Arabia said, “It is aimed at improving not only the Saudi economy, but also the economies of fellow oil producing countries and the overall situation of the oil industry.
As Saudi Arabia carried out additional production cuts alone, other countries were able to maintain production levels in January, and Russia and Kazakhstan could allow an increase of 75,000 barrels in February and an additional 75,000 barrels in March. There was.
Russia’s Deputy Prime Minister Alexander Novak praised Saudi Arabia’s production cuts as’great devotion’ and assessed that it played a major role in returning market stock levels to normal.
The Saudi side also dismisses some concerns that the rival US shale industry could benefit, and the reduction is not only a gesture of good faith to other OPEC+ countries, but the spread of Corona 19 could hurt global oil demand. He mentioned that it is a preemptive measure to have.
Saudi Minister Abdulaziz said the measure could reduce global inventory levels and improve future market responsiveness.
After Saudi Arabia’s announcement of sole production cuts, Brent’s recent monthly price surged nearly 5% to $53.53 a barrel, and other OPEC+ oil producers who were not aware of the Saudi announcement were surprised.
Russia’s Deputy Prime Minister Alexander Novak praised Saudi Arabia’s production cuts as’great devotion’ and assessed that it played a major role in returning market stock levels to normal.
Meanwhile, in the course of this consultation, Russia is being evaluated that it can re-create problems in future OPEC+ discussions by showing its willingness to expand its market share while continuing to evaluate more positively than other countries on the recovery of oil demand.
With this agreement, OPEC+ has confirmed the scale of production cuts by the first quarter, and plans to determine the cut production in April through a meeting on March 4th. Prior to this, the committee to evaluate the production cuts implementation rate and market situation will hold meetings on the 3rd and 3rd of next month, respectively.
As a result, OPEC+’s total production in February is expected to be limited to 35728,000 barrels, a decrease of 8125,000 barrels from the October 2018 level, including Saudi Arabia’s sole production cut, and is expected to increase to 35.8 million barrels in March.
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