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Page added on December 31, 2008

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Saudi Arabia oil taps to be tightened again

LONDON – Top exporter Saudi Arabia is set to cut oil supplies further in the new year, potentially taking output below its agreed OPEC target, as it strives to shore up a collapsing market, oil market sources said on Tuesday.

It lowered supply to 8.2 million barrels per day (bpd) in December as the oil price dived to less than US$40, far below the US$75 a barrel named by Saudi King Abdullah as a fair price.

The kingdom had previously increased production unilaterally to about 9.7 million bpd in August to calm an oil market that shot up to a record of nearly US$150 in July.

Since then, it has reduced supplies by roughly a fifth and further “significant” output curbs are expected in February, trade sources said.

“This is because of the price. The Saudis want it higher,” said a major buyer.


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