Saudis add 1 MMbbl to output cut to help stabilize oil prices
16:30, Tuesday, 12 May, 2020
Saudi Arabia announced an extra voluntary oil-production cut of 1 million barrels a day, bringing output to its lowest in 18 years as the kingdom tries to prop up a nascent recovery in energy markets. Riyadh aims to pump just under 7.5 million barrels a day in June, compared with an official target under the most recent OPEC+ agreement of just under 8.5 million a day. If Saudi Arabia makes good on its pledge, its production will drop to the lowest since mid-2002, according to data compiled by Bloomberg.
The cut is particularly symbolic as it brings Saudi production below 8 million barrels a day, long seen by many consultants and traders as a red line the kingdom wouldn’t cross. It also signals the urgency felt by Riyadh to stabilize the market as rock-bottom prices force it to impose austerity measures, including ending monthly pay allowances for millions of public employees and raising taxes.