Saudi Arabia & Other Countries Announce Surprise Oil Output Cuts

  • USOil
    (${instrument.percentChange}%)

OPEC+ Production Cuts

The de facto leader of OPEC announced on Sunday a surprise voluntary slash of its oil output by 500,000 barrels/day, from May until the end of 2023. This was a coordinated move along with other OPEC and non-OPEC cooperating countries.

Here are the output cuts announced yesterday, in barrels per day (bpd), bringing the combined reduction to 1,149,000 barrels/day:

Saudi Arabia: 500,000 bbd [1]
Republic of Iraq: 211,000 bpd [2]
United Arab Emirates: 144,000 bpd [3]
Kuwait: 128,000 bpd [4]
Kazakhstan: 78,000 bpd [5]
Algeria: 48,000 bpd [6]
Oman: 40,000 bpd [7]

Russia meanwhile had recently announced the extension by a few months of its 500,000 barrels per day production cut plan. Yesterday PM Novak said this plan will stretch to the end of 2023, in line with the above countries, according to TASS. [8]

Sunday's announced slashes are in addition to the existing 2 million bpd cuts agreed by OPEC and non-OPEC Participating Countries back in October 2023 [9]. As such, the planned reduction from May until the end of the year is in excess of 3.5 million barrels/day.

USOIL Reaction

The commodity had slumped to 2023 lows in mid-March as the banking rout form unfolded and fears of recession creeped in. However, concerns around the health of the financial system seem to have eased and the Fed moved to a more conservative stance, helping USOil to a two-week rebound.

Trade the News: View our Economic Calendar

After Saudi Arabia and countries announced on Sunday that they will be slashing their oil output, USOil jumped to the highest level since January.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 03 Apr 2023 https://www.spa.gov.sa/viewfullstory.php

2

Retrieved 03 Apr 2023 https://ina.iq/eng/25782-iraq-decides-to-voluntarily-reduce-production-by-211-thousand-bpd.html

3

Retrieved 03 Apr 2023 https://wam.ae/en/details/1395303144358

4

Retrieved 03 Apr 2023 https://www.kuna.net.kw/ArticleDetails.aspx

5

Retrieved 03 Apr 2023 https://www.gov.kz/memleket/entities/energo/press/news/details/530411

6

Retrieved 03 Apr 2023 https://www.aps.dz/en/economy/47187-opec-algeria-to-voluntarily-reduce-its-quota-by-48-000-barrels-day-from-may

7

Retrieved 03 Apr 2023 https://omannews.gov.om/topics/en/80/show/112359/ona

8

Retrieved 03 Apr 2023 https://tass.com/old-economy/1598195

9

Retrieved 16 Apr 2024 https://www.opec.org/opec_web/en/press_room/7021.htm

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.