Saudi Arabia to end voluntary cuts on top of OPEC+ pact
DUBAI/LONDON/MOSCOW (Reuters) - Saudi Arabia will boost output in July to match its output OPEC quota while ending deeper, voluntary cuts amid signs of global demand recovering, the Saudi energy minister said on Monday.
ncy/Handout via REUTERS
OPEC, Russia and other producers agreed on Saturday to extend record output cuts of 9.7 million barrels per day (bpd) into July, curbing global supply by almost 10% amid a steep slump in demand due to the coronavirus pandemic.
For June, Saudi Arabia, Kuwait and the United Arab Emirates (UAE) had pledged to cut by 1.18 million bpd on top of that, with Riyadh forfeiting 1 million bpd.
Saudi Energy Minister Prince Abdulaziz bin Salman said that this would not continue in July, when Saudi Arabia will pump its OPEC quota, amid signs of demand recovery as nations around the world lift strict lockdown measures.
“The voluntary cut has served its purpose and we are moving on. A good chunk of what we will increase in July will go into domestic consumption,” Prince Abdulaziz told an OPEC+ virtual news conference.
Saudi crude use for power generation typically increases in the hot summer months, the minister noted.
Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act as they push up oil prices to meet their budget needs while not driving them much above $50 a barrel to avoid encouraging a resurgence of rival U.S. shale production.
