Saudi Arabia to cut oil output to raise prices - report

[CatWoman]

LONDON (AFX) - Saudi Arabia, which already has aggressively shaved its oil output in a battle to shore up prices, will reduce production by another 158,000 barrels per day from Thursday and more cuts are on the way, the Wall Street Journal reported, citing an unnamed senior Saudi official.

The latest cut means Saudi Arabia will have reduced production by about 1 mln barrels per day in the past six months, the report said.

The Saudi official couldn't be precise about the country's output after the reduction this week but said that it would be 'around 8.5 million barrels a day.'

The reductions, part of a broader OPEC campaign, are intended to shrink inventories of oil that had ballooned last year as demand growth for petroleum faltered, The Journal said.

The Saudi cut is seen as an aggressive move to keep the price of the US benchmark crude above 55 usd a barrel, the report said, citing Roger Diwan, an analyst at PFC Energy, a Washington industry consultancy.

Word of the Saudi move to further trim output comes as traders are trying to learn if OPEC is going to cut its production in line with its announced plans, the Journal said, noting OPEC's members often produce more than they have pledged.

Saudi Arabia's reduction is nearly double the total cuts it agreed to make under two output accords hammered out at OPEC at meetings in October and December, the WSJ said. The 10 OPEC members that committed to the cuts were producing about 27.5 mln barrels a day in September, the Journal said, and if the agreed-upon cuts are fully implemented, output would drop to 25.8 mln barrels a day in a global oil market of about 85 mln barrels a day.

http://www.forbes.com/markets/feeds/afx/2007/01/30/afx3374321.html

[CrazyOrangeCat]

1. I knew a guy who worked over there for a year.

He said decadence in the upper class was unbelievable.

Small wonder that the Bushes are always hugging and kissing on the Saudi royals . . .