Saudi crude output to fall to 9.8 million bpd in March — Falih

Saudi Energy Minister Khalid al-Falih speaks during a news conference in Riyadh, Saudi Arabia January 9, 2019. (Reuters)
Updated 12 February 2019
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Saudi crude output to fall to 9.8 million bpd in March — Falih

  • The March production figure means Saudi would be voluntarily cutting output by more than 500,000 bpd

LONDON: Saudi Arabia plans to produce around 9.8 million barrels per day of oil in March, over half a million bpd below its pledged production level under a global supply-cutting deal, Energy Minister Khalid Al-Falih told the Financial Times.
Exports would fall in March to 6.9 million bpd, according to the article published on Tuesday.
The March production figure means Saudi would be voluntarily cutting output by more than 500,000 bpd below its pledged production level under a deal between the Organization of the Petroleum Exporting Countries and allies led by Russia.
Under the deal reached in December and which came into effect at the start of the year, Saudi Arabia’s target production is 10.311 million bpd.
The news boosted Brent crude prices by more than 2 percent to nearly $63 a barrel.
Production in March would be 1.2 million bpd lower than Saudi Arabia’s November output, which was an all-time high.
In the interview, Falih addressed a US bill that might expose OPEC to antitrust lawsuits, saying the legislation could be “harmful” to the global economy, and expressed his hope that the United States would “do the right thing.”
He said if Saudi Arabia were unable to balance the market by adjusting production, the world would suffer “irreparably.”
A US House of Representatives committee approved the bill known as No Oil Producing and Exporting Cartels Act, or NOPEC, last week.


Bank lending for ‘real economy’ key to boost China growth: central bank official

Updated 18 min 15 sec ago
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Bank lending for ‘real economy’ key to boost China growth: central bank official

  • ‘The central bank doesn’t wish to use administrative methods to require banks (to lend)’
  • Quantitative easing is neither necessary nor possible at the moment

SHANGHAI: China should encourage its banks to support smaller, private firms in the real economy, rather than forced lending or policies such as quantitative easing, a state newspaper quoted a central bank official as saying on Saturday.
“The central bank doesn’t wish to use administrative methods to require banks (to lend),” Sun Guofeng, head of the monetary policy department at the People’s Bank of China (PBOC), told the Financial News, a bank publication.
“It wants to establish positive encouragement mechanisms though monetary policy tools to encourage banks to actively increase their support for the real economy, especially toward smaller and privately-owned firms,” Sun said.
The comments come a month after Sun wrote a commentary in which he argued that problems with timely capital replenishment, bank liquidity gaps and poor rate “transmission” are three major constraints on banks’ supply of credit.
In the interview with the Financial News, Sun said monetary policy transmission had “noticeably improved,” showing that steps to enhance transmission mechanisms had been effective.
He said the central bank would increase the strength of innovation in monetary policy tools.
Perpetual bond issuance “is only one breakthrough” in reducing capital constraints on banks, Sun said, adding that “other methods” could be used in the future.
He said that quantitative easing was neither necessary nor possible at the moment, noting that under China’s financial system the significance of the central bank buying Chinese treasury bonds on the secondary market is limited, and that the PBOC is barred from buying the instruments on the primary market.
China’s banks made the most new loans on record in January following a series of moves to boost lending as authorities try to prevent a sharp slowdown in the world’s second-largest economy.