Saudi Arabia to keep crude oil exports under 7 million barrels a day in April to raise prices

Saudi oil minister Khalid Al-Falih wants oil exporters inside and outside OPEC to continue cooperating on production after their agreement expires at the end of this year. (Reuters)
Updated 14 March 2018

Saudi Arabia to keep crude oil exports under 7 million barrels a day in April to raise prices

DUBAI: Saudi Arabia plans to keep its crude oil production in April below 10 million barrels per day (bpd), and maintain exports under 7 million bpd, the energy ministry said on Wednesday, as the top OPEC producer wants to end a global supply glut and boost prices.
Saudi Arabia, the world’s biggest oil exporter, has been pumping below its OPEC target since January and reducing its crude shipments, particularly to the US, as it turns its focus on cutting exports in an attempt to drain global oil stocks.
“Despite nominations coming in at 100,000 barrels a day, higher than the previous month, allocations were maintained on par with their March levels,” the ministry said in a statement.
A spokesman for the energy ministry said that Saudi Arabia, along with the OPEC and non-OPEC oil producers participating in a global supply cut agreement, “remain committed to pursuing the common objective of restoring inventories back to their normal levels.”
OPEC and non-OPEC producers, led by Russia, have agreed to maintain oil output cuts until the end of 2018. The aim is to reduce global inventories and support prices.
OPEC has made the five-year average its main target and managed to reduce the glut to around 74 million barrels above that benchmark, from above 300 million when the cuts began in 2017.
OPEC has delivered more than 100 percent of the output cuts that members pledged under the deal, according to figures from OPEC and other analysts, helped in part by an involuntary drop in Venezuela, where output is falling amid an economic crisis.
“We are happy with the excellent overall conformity levels and look forward to all participating countries maintaining or exceeding full conformity with their commitments as agreed,” the Saudi energy ministry spokesman said.
But the relentless rise in US production has this year put pressure on oil prices. US oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.
Brent crude futures were trading at around $64.93 per barrel on Wednesday, down from above $70 in January.
US crude oil production, pushed up largely by shale oil drilling, has risen by almost a quarter since mid-2016 and output soared past 10 million bpd in late 2017, overtaking production by Saudi Arabia.
OPEC meets next in June to decide its output policy. Global oil producers agreed they should continue cooperating after their agreement expires at the end of this year, Saudi Arabia’s energy minister Khalid Al-Falih said in January.


China delays timetable for Boeing 737 MAX return

Updated 31 min 6 sec ago

China delays timetable for Boeing 737 MAX return

  • The best-selling 737 MAX was grounded around the world since March 2019 after two deadly crashes blamed on the plane's new navigation system 

BEIJING: China, the first country to ground Boeing Co’s 737 MAX following two fatal crashes, has not set a timetable for the plane’s return to service, the head of its aviation regulator said on Thursday.

The Civil Aviation Administration of China has set three principles for the jet to return to service in China, Feng Zhenglin, director at the agency, said.

Design changes need to be certified, pilots need to receive proper training and effective improvements need to be made to address the specific findings of investigations into the crashes, Feng said.

“Based on these three principles, we have not set a timetable for Boeing 737 MAX’s return to service here. As long as these conditions are met, we’re happy to see the MAX return to service in China,” said Feng.

“But if these conditions cannot be met, we still have to carry out strict airworthiness certification in order to ensure safety.”

The 737 MAX, which has been grounded around the world since March 2019, is expected receive regulatory approval from the European Union Aviation Safety Agency to resume flying in November.

The US Federal Aviation Authority (FAA) has not publicly disclosed a timeline for the MAX’s return of service, but sources familiar with the matter have said it is expected to lift its grounding order around mid-November, although the date could slip.

American Airlines has said that it plans to return the jet to service at the year-end, subject to FAA approval.