Saudi Arabia, OPEC`s principal producer, cut its oil output sharply in January to less than 3.8 million barrels a day in an attempt to keep from flooding the already depressed oil market, the Middle East Economic Survey said Monday.
Most oil-industry observers contend Saudi Arabia has engineered the current oil-price slide by selling surplus crude in a high-stakes gamble to force non-OPEC producers to curb production and prop up prices.
But the authorative oil journal, which has close ties to the Saudis, said the kingdom`s production was well below its 4.35 million barrel-a-day quota established by the Organization of Petroleum Exporting Countries.
Like other OPEC members, Saudi Arabia is caught between a need for oil revenues and a weak market that is paying $20 a barrel or less for crude, a situation that has been exacerbated by overproduction.
”Contrary to persistent media reports claiming that Saudi Arabia has boosted its oil output to 5 million or 6 million barrels a day,” the journal said, ”actual Saudi production is running at very much less than that.”
The publication quoted an ”authoritative Saudi source” as saying January production averaged 3,787,012 barrels daily, substantially below the December level of 4,276,071 barrels a day.
The journal attributed the reduction to restraint on the part of the Saudis rather than to any slackening of demand for Saudi crude.
The Saudi government intends to respect the 4.35 million barrel-a-day OPEC limit, a goal that forced the kingdom to reduce exports in the latter part of January, the publication said.
Several tanker loadings scheduled for the last three days of January were delayed, with the result that average January production dropped below the level that had been anticipated, the journal said.
But it said the Saudis still intend to defend their share of the oil market and to insist that any ”restabilization” of world oil prices must include participation by non-OPEC exporting countries in a production regulation agreement with the cartel.
