With the higher demand summer season approaching, Saudi Arabia has ramped up its oil production to around 10mn b/d. While a gradual increase in output is expected as temperatures in the kingdom begin to rise, the upward trajectory is significant. It signals that the kingdom has not had a change of heart since it steered fellow Opec members toward a decision last November to maintain their output ceiling.
The 27 November meeting was a watershed for Opec, whose 12 members announced to a stunned market that they had decided to hold output steady, even as oil prices were hurtling down and the US shale oil boom was in full swing. Saudi Arabian Oil Minister Ali Naimi has not tired since of explaining the reasoning behind the decision to maintain a ceiling of 30mn b/d.
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