According to a source in the Ministry of Energy, Saudi Arabia will keep its voluntary 1 million barrel per day oil production cut in November and December.
As a result of the change, Saudi Arabia will produce about 9 million bpd for the remaining two months of the year.
Prior to the announcement, the price of Brent crude oil futures was down 58 cents, or 0.64 percent, on the day, closing at $90.34 a barrel. However, once the cuts were official, the price was down 0.46 percent at 12:21 p.m. Saudi time.
In April, the Kingdom announced voluntary production cuts of 500,000 bpd through the last day of December 2024. This cut is in additional to the voluntary cuts.
The Saudi Press Agency claimed that “the source stated that the decision on the decrease will be revisited next month, with the option of increasing the decrease or increasing production.”
According to the source, the International Organization of the Countries that Export Petroleum and its allies, also known as OPEC+, are strengthening their precautionary measures in order to protect the stability and equilibrium of the market.
Prince Abdulaziz bin Salman, the energy minister for Saudi Arabia, urged everyone to have faith in OPEC+ in June and referred to it as the most successful global organization actively preserving market stability.
“Being on the secure side usually means taking preventative action. Additionally, it fits with the standard OPEC rhythm of being proactive and preventive, Prince Abdullah told CNBC.
Reuters reported that Russia stated it will evaluate its voluntarily 500,000 bpd output limit, established back in April, in Nov and would maintain its present 300,000 bpd petroleum export cuts through the end of 2023.
The Saudi oil minister stated that in order to reduce volatility, international energy markets require loose regulation when speaking at the Global Petroleum Convention in Calgary in September.
Prince Abdulaziz noted that it’s not always a good idea to rely on predictions of oil supply and demand.
“I believe it as soon as I see it. That’s my mantra, and it’s always best to live by it. Hallelujah, we can generate more when reality plays out as predicted,” he exclaimed.
The energy minister continued by saying that although Saudi Arabia intends to produce and trade clean electricity and hydrogen, the country needs collaborations with other nations, offtake customers, and investors.