Video source: YouTube, CNBC Television
FRANKFURT, Germany (AP) – Saudi Arabia on Tuesday said it would cut oil production by one million barrels per day, accepting the burden of supporting prices in the energy market as a “move goodwill ”following a meeting with other raw producing countries. .
The decision follows a meeting between countries that are part of the OPEC oil quarter and allies such as Russia that have coordinated their production levels in recent years in an effort to turn the market around. . The pandemic has sparked uncertainty about when economic recovery could arrive and a huge increase in energy demand.
OPEC chief Saudi Arabia has issued a warning, saying demand for oil remains volatile even as the release of the vaccine raises hopes of a return to more normal behavior. His energy minister, Abdulaziz bin Salman, said at a news conference on Tuesday that his country would cut its output unilaterally to support prices.
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“We hope this good move is not in vain,” he said.
OPEC countries and allies like Russia had decided in December to gingerly increase daily output by 500,000 barrels at the beginning of the new year and then reassess the monthly oil market. Their goal is to increase production by 2 million barrels per day. That would partially remove the 7.7 million barrels per day in production cuts agreed last year.
OPEC is under different pressure after last year’s fall in oil prices as the pandemic kept energy consumption and travel back. Last year’s output cuts kept prices from falling even more than they would have. Raising output now as a revival on the horizon would increase revenues for producing countries whose budgets are hard to see with lower prices. But pumping too early could weaken the small reversal in energy prices.
The decision came Tuesday that energy prices were jumping. Oil rose 5.4% to $ 50.18 a barrel on the New York Mercantile Exchange while international crude Brent rose 5.4% to $ 53.84.
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Source: AP News
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