Saudis sharply cut oil output

Press, 22 February 1982, Page 8

Saudis sharply cut oil output

NZPA-Reuter New York Saudi Arabia has sharply cut its oil output because of weakness in world oil markets, oil-industry sources have said. The output of the world's largest exporter had dropped to between seven and 7.5 million barrels daily this month, the sources said. Industry experts said that at the start of the year Saudi Arabia was producing close to its official ceiling of 8.5 million barrels per day. But by early February output was down to about eight million. The Saudis have been under pressure from fellow members of the Organisation of Petroleum Exporting Countries to cut output in order to reduce the present world glut. Oil-company executives have been saying that unless Saudi output is allowed to

fall, perhaps as low as six million barrels daily in due course, it may be impossible to halt a slide in oil prices. London oil sources said last week that on the free, non-contract crude-oil market Saudi Arabian light crude had traded at about SUS 29 a barrel, compared with an official Saudi price for contract sales of SUS 34. One oil-industry source said: “Saudi Arabia has been trying to defend its $34 per barrel price for Saudi light crude by allowing the Aramco companies to lift a little less than their implied quotas.” He emphasised that there had been no official cut in the Saudi output ceiling. The companies to which the Arabian-American Oil Company (Aramco) sells the bulk of Saudi oil are Exxon, Mobil, Texaco, and the Standard Oil Company of California.