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Page added on January 30, 2009

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Saudi could pump less oil despite budget, gas issues

DUBAI (Reuters) – Top oil exporter Saudi Arabia may cut output more as it seeks to put a floor under oil prices, in spite of the challenges that would pose to domestic energy supply and to its budget.

The kingdom plans to pump in February below its OPEC target of 8.05 million barrels per day (bpd), undershooting what was already a record OPEC supply cut agreed in December.

“The Saudis know that extraordinary times require extraordinary measures,” said David Kirsch of Washington-based PFC Energy.

“If measures are needed to stabilize the oil price and market at lower production levels, they’ll be prepared to take them. They are ready for a year of deficit and they can finance that for longer than other producers.”

As the oil exporters’ group races to match supply with falling demand, Saudi Oil Minister Ali al-Naimi has said he would do whatever it takes to balance the market.

Reuters



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