S. Arabia to Reduce Crude Output to Lowest Since Jan.

The Saudis are more than fully complying with the deal.The Saudis are more than fully complying with the deal.

Saudi Arabia pared its oil production last month to the lowest since January, staying below the output level it pledged to maintain as part of a global deal to reduce crude supplies, according to a person with knowledge of the data.

The biggest producer in OPEC cut output by 111,000 barrels a day last month to 9.9 million a day, according to the person, who asked not to be identified because the information is not public, Bloomberg reported. Production had increased in February to 10.011 million barrels a day as the country replenished its own storage tanks.

Saudi Arabia and Russia are leading the agreement by the Organization of Petroleum Exporting Countries and other producers to curtail oil supplies and end a three-year surplus. Under the accord reached in December, Saudi Arabia pledged to cap its output at 10.058 million barrels a day.

“The Saudis are more than fully complying with the deal,” Mohamed Ramady, a London-based independent analyst, said Tuesday by phone. “This is good news for the market and prices.”

Saudi Arabia cut back shipments to the US as a result of the lower production, Ramady said. US oil imports from the kingdom declined 24% in the week ended March 31, according to Energy Information Administration data. Shipments were 888,000 barrels a day, the smallest since December.

OPEC's unexpectedly high level of commitment to planned cuts has boosted oil prices by around 20% from November, when OPEC announced the deal to scale back production.

Kuwaiti Oil Minister Essam al-Marzouq said on Monday compliance with the cuts by all oil producers in January was around 87%, and reached about 94% in February.  He also said he sees “positive indicators” in the gradual decline of the global oil inventories, expecting it to continue, which would reflect positively on the oil market in the coming months.

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