Saudi Arabia will extend voluntary production cuts of 1 million barrels per day through September. Saudi Arabia will extend a voluntary crude oil production limit of 1 million barrels per day into September, the third consecutive month of such reductions, the Saudi Press Agency reported Thursday.
“In effect, the Kingdom’s production for September 2023 will be approximately 9 million barrels per day,” the Saudi Ministry of Energy source stated.
The 1 million barrel per day reduction, which was also implemented in July and August, “can be extended or extended and deepened,” according to the SPA. In addition to the other voluntary production cuts of 1.66 million barrels per day, some members of the Organization of the Petroleum Exporting Countries are implementing until the end of 2024.
The production policy agreed upon by OPEC and its allies, known as OPEC+, excludes voluntary reduction. The Joint Ministerial Monitoring Committee, one of the group’s technical committees, meets every Friday to review market fundamentals. The JMMC cannot decide on policy on its own, but it can convene an extraordinary meeting of OPEC ministers to do so.
Shortly after announcing the extension of Saudi Arabia’s voluntary production reduction, oil prices remained relatively unchanged.
At 2:30 p.m. London time (9:30 a.m. ET), Brent futures with an October expiration were trading at $83.65 per barrel, up 45 cents per barrel from Wednesday’s settlement. The September delivery WTI contract was priced at $79.97 per barrel, up 48 cents per barrel from the previous close.
In the first half of the year, prices were under pressure due to macroeconomic concerns, inflationary pressures, turmoil in the banking sector, and a sluggish recovery in Chinese demand.
The Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), based in Paris, foresee a rise in demand that could contribute to supply constraints in the second half of 2023.