Arab players are reducing their oil production more than expected. This is due to dip in demand and need for controlling price glut. This includes Saudi Arabia, UAE and even Kuwait. UAE Minister For Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei has announced that June will see further cuts in production, keeping tandem with an understanding with other OPEC member nations. It would be reduced by 100,000 barrels per day.
Further, Al Mazrouei has said UAE is acting in solidarity with the Kingdom and said, “In support of efforts led by the Kingdom to further restore stability to energy markets, the UAE has committed to undertake an additional voluntary cut of 100,000 barrels per day in the month of June.”
Saudi Arabia also, on its part and as a part of the OPEC agreement will also cut its production to 8.5 million bpd. But, it has retracted its statement and said it would cut to 7.492 million bpd in June, after the Saudi energy ministry ordered Aramco to cut bigger.
The price cuts are being seen as the main reason for a sudden spike in the oil prices. West Texas Intermediate crude oil rose 2.3% to $25.32 a barrel. International benchmark Brent Crude also gained 1 percent to $31.47 per barrel at the same time.
The kingdom’s second round of cuts comes after the historic deal with OPEC and its allies in April. Now, Saudi Arabia’s June production level will be roughly 7.5 million barrels per day, about 4.8 million barrels per day lower that April output.
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