Crude oil prices continued to climb on Wednesday after Saudi Arabia reportedly announced plans to cut crude output even further.
Saudi Energy Minister Khalid al-Falih has said the kingdom is aiming to curtail production to 9.8m bbl/day in March. This would mark a 1.2m bbl/day cut in output from the record levels seen in November, and an 850,000 bbl/day decrease from October levels. OPEC members pledged 800,000 bbl/day supply cuts versus October levels from January. Should Saudi Arabia hit the proposed March targets, they will have single-handedly fulfilled OPEC’s intended output reduction quota.
In afternoon trading, a bearish EIA reports caused futures to unwind, paring some of the gains made earlier in the session. US crude stocks rose to the highest since November 2017 as refiners reduced runs. Inventories grew by 3.6m bbl in the week to the 8 of February, well above analysts’ expectations of 2.7m bbl.
After the intra-day volatility fuelled by the EIA report both benchmarks moved sideways, settling well into positive territory.
Additional reporting by Ignacio Sotolongo