OIL GLUT?

Qatar Today - - BUSINESS -

Saudi Ara­bia will need to keep cut­ting oil out­put to sus­tain prices above $100 (QR364) a bar­rel, even after the king­dom's largest re­duc­tion in two years, ac­cord­ing to BNP Paribas SA and So­ci­ete Gen­erale SA, as re­ported by Bloomberg.

The world's big­gest crude ex­porter told OPEC that it pumped 408,000 bar­rels a day fewer last month, about as much as Aus­tralia pro­duces. Out­put rose in Iran, Iraq and Nige­ria, adding to sup­ply that drove bench­mark Brent crude fu­tures be­low $100 (QR364) this month for the first time since June 2013. Saudi Ara­bia prob­a­bly will have to cut a sim­i­lar amount again to sta­bilise prices, the banks said.

Global oil de­mand growth this year will be the weak­est since 2011, just as the U.S. shale boom means oil pro­duc­tion from coun­tries out­side OPEC rises by the most since the 1980s, ac­cord­ing to the In­ter­na­tional En­ergy Agency. The glut is prompt­ing most of OPEC's Mid­dle East­ern mem­bers, in­clud­ing Saudi Ara­bia, to cut prices to cus­tomers.

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