Riyadh started reducing production ahead of schedule

Saudi Arabia may start cutting oil production in the very near future, before May. This was reported by the Wall Street Journal on Monday, April 20, citing sources.

According to the newspaper, such a decision is considered after the cost of American oil WTI with delivery in May reached negative values.

“Saudi Arabia is considering reducing oil production as soon as possible, rather than in May… The discussion followed after the price of American oil became negative,” writes the edition.

The price of WTI oil with delivery in May ended the main trading on Monday at minus $37.63 per barrel on the New York Mercantile Exchange, having fallen by 300%. The quotes fell to negative values for the first time in history.

OPEC+ countries agreed on April 12 to cut oil production by 9.7 mn barrels per day in May-June, 7.7 mn in the second half of the year and 5.8 mn further until the end of April 2022. The basis of reference is October 2018, but for Russia and Saudi Arabia 11mmbpd is taken, with 23%, 18% and 14% respectively.