Saudi Arabia’s voluntary oil production cut is set to help the oil market navigate through seasonally low oil demand during the first quarter, OPEC’s secretary general told an industry event on Wednesday.
Saudi Arabia surprised the market earlier this month when it pledged to cut production by a further 1 million barrels per day in February and March.
Mohammad Barkindo, who spoke to the Gulf Intelligence online forum, said oil inventories globally - in both OECD and non-OECD countries- are “very high”.
Barkindo said the market should not be concerned that the OPEC+ alliance will overtighten the market, nor should it worry about it pumping too much, as monthly meetings of the group are aimed at retaining flexibility.
"The fragilities and uncertainties of the market and this world that we live in post-COVID requires us to meet every month to ensure this market does not relapse into the huge imbalances we saw last year," he said.
"We had always believed that we have a shared responsibility to maintain stability in the market," he noted.