DUBAI (Reuters) - Saudi Arabia plans to keep its crude oil production in April below 10 million barrels per day (bpd), and maintain exports under 7 million bpd, the energy ministry said on Wednesday, as the top OPEC producer wants to end a global supply glut and boost prices.
Saudi Arabia, the world’s biggest oil exporter, has been pumping below its OPEC target since January and reducing its crude shipments, particularly to the United States, as it turns its focus on cutting exports in an attempt to drain global oil stocks.
“Despite nominations coming in at 100,000 barrels a day, higher than the previous month, allocations were maintained on par with their March levels,” the ministry said in a statement.
A spokesman for the energy ministry said that Saudi Arabia along with the OPEC and non-OPEC oil producers participating in a global supply cut agreement “remain committed to pursuing the common objective of restoring inventories back to their normal levels.”
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to maintain oil output cuts until the end of 2018 aiming to reduce global inventories and support prices.
OPEC has made the five-year average its main target and managed to reduce the glut to around 74 million barrels above that benchmark, from above 300 million when the cuts began in 2017.
OPEC has delivered more than 100 percent of the output cuts that members pledged under the deal, according to figures from OPEC and other analysts, helped in part by an involuntary drop in Venezuela, where output is falling amid an economic crisis.
“We are happy with the excellent overall conformity levels and look forward to all participating countries maintaining or exceeding full conformity with their commitments as agreed,” the Saudi energy ministry spokesman said.
But the relentless rise in U.S. production has this year put pressure on oil prices. U.S. oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.
Brent crude futures LCOc1 were trading at around $64.93 per barrel on Wednesday, down from above $70 in January. [O/R]
U.S. crude oil production, pushed up largely by shale oil drilling, has risen by almost a quarter since mid-2016 and output soared past 10 million bpd in late 2017, overtaking production by Saudi Arabia.
OPEC meets next in June to decide its output policy. Global oil producers agreed they should continue cooperating after their agreement expires at the end of this year, Saudi Arabia’s energy minister Khalid al-Falih said in January.
Reporting by Rania El Gamal; editing by Jason Neely and Jon Boyle