Saudi Arabia considering an extension in oil supply cuts

Saudi Arabia considering an extension in oil supply cuts
Saudi Arabia could extend oil supply cuts to force prices up, as the country struggles with a continued economic downturn.
2 min read
11 September, 2017
Falih has discussed oil price cuts with other producers [Getty]
Saudi Arabia could cut oil supplies, as the kingdom's oil minister held talks with his Venezuelan and Kazakh counterparts on an extension on outflow restrictions.
The talks helped counter a drop in prices as two hurricanes tore through the southern US, leading to reduced demand in the world's biggest economy.

Power has been cut to 4 million homes in Florida as millions fled the state as Hurricane Irma moved up the coast.

Despite this, oil prices rose by around 0.8 percent.

"The oil market reacted to the Saudi talks," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting told Reuters.

"The drop in US oil refining is also to be offset by higher processing at other nations, so worries over a substantial cut in crude oil demand are fading."

Saudi Energy Minister Khalid al-Falih agreed with his Kazakh counterpart on oil supply cuts.

OPEC and Russia have also said they would cut oil production by 1.8 million barrels per day, as a supply glut continues and Iran prepares to boost its output.

Saudi Aramco has also said it will add 1.9 million barrels of crude oil to its Japanese storage on Wednesday.

Saudi Arabia has energy-reliant economy continues to struggle since oil prices tanked in 2014.

After first trying to keep supplies steady to keep its market share despite the oil glut, it has recently tried to cut production as Saudi's economy faces an uncertain future.

Saudi Arabia has been forced to revise or cut economic targets as projected growth has not been met.