OPEC's January production is likely to be lower than expected, Saudi Aramco's former CEO said in a statement to CNBC on Thursday.
The oil cartel agreed last week to shave 800,000 barrels per day from October production levels, with its non-OPEC allies agreeing to cut 400,000 barrels per day for a combined 1.2 million barrels a day. But Saddam al-Husseini, former executive vice president of Saudi Aramco, told CNBC that OPEC will likely reduce in January about 1 million barrels per day from October levels, adding that it is possible to reduce the cartel to 1.2 million bpd-that is in favor of its allies who have promised to cut 400,000 bpd.
All OPEC signs last week, following a sharp decline in oil prices, showed OPEC is aware that 1.2 million barrels in the promised cuts will not calm market turmoil. The United Arab Emirates Energy Minister said on Tuesday that the rebalance should be held in the first quarter of 2019; he also added that OPEC will be deeply downgraded if it is shown that there is insufficient volume of oil that is being withdrawn from the market.
Then came the news that Saudi Arabia's exports fell sharper than expected, and indications are that today fewer OPEC barrels, less than five years ago, actually made their way to the United States in December.
Most analysts agree that oil prices will remain low if OPEC and its allies fail to make their promise. Oil prices were late on Thursday afternoon after reports of alleged media, and WTI traded 1.22 percent per barrel to $ 47.11, while Brent rose 1.78 percent to $ 55.89 per barrel.
By Julian Geger for Oilprice.com
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