Saudi Arabia said to cut oil output to lowest since January

KUWAIT (Bloomberg) -- 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 bpd last month to 9.9 MMbpd, according to the person, who asked not to be identified because the information isn’t public. Production had increased in February to 10.011 MMbpd 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 MMbpd.

“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.”

Brent crude, a global benchmark, was down 2 cents, or less than 0.1%, at $55.96/bbl at 4:17 p.m. in Dubai, after falling as much as 0.5% earlier in the day. Prices have dropped 1.6% this year.

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

Production in January was 9.748 MMbpd, according to OPEC’s monthly report, based on direct communication from the kingdom. The estimate based on OPEC’s external sources was 9.865 MMbpd for January.