Saudi Arabia on the Front-foot for Higher Oil Price

The Kingdom of Saudi Arabia is not having any of it as regards oil prices. The middle-east giant following OPEC+ pledge to cut production last December has further taken conscious steps to cut below its allocation. Despite geopolitical raffles effecting more production cuts in Venezuela, OPEC have announced that they still see worsening trend with global demand.

The energy minister Khalid al-Falih told the Financial times that the Kingdom would reduce its oil production to 9.8million barrels per day in March. Exports would fall to near 6.9million barrels per day from 8.2million barrels per day three months ago – a commitment far below what it pledged to OPEC.

We see this announcement as very bullish for oil price – serving as a significant demand bolster to oil price in the near-term.

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