Saudis join three other OPEC+ nations cutting output early

LONDON (Bloomberg) --Saudi Aramco began reducing oil production earlier this week ahead of the May 1 start date for OPEC+ output cuts, according to a Saudi industry official familiar with the matter.

Aramco has begun to curtail production from about 12 million barrels a day to achieve the agreed level of 8.5 million barrels a day, the person said, asking not to be named discussing private information. The country joins fellow OPEC members Kuwait, Algeria and Nigeria in kicking off cuts early.

The Organization of Petroleum Exporting Countries and its allies -- 23 nations in all -- agreed this month to slash global supply by 10% in an effort to balance a market roiled by the coronavirus crisis. Although the cutbacks will amount to an unprecedented 9.7 million barrels a day, crude prices have continued to slide as worldwide lockdowns wipe out demand.

Aramco is likely to be pumping at its targeted level slightly ahead of May 1, the person said. Rather than an effort to quick-start the output cuts, the gradual reduction reflects the several days that Aramco needs to adjust production safely.

The company said it couldn’t immediately respond to a request for comment.

Kuwait said two days ago it had started cutting oil output early as it “felt responsibility to respond to market conditions.” Algeria also said this week that its supply curbs would start immediately. Meanwhile Nigeria said it plans to cut production regardless of the May 1 start date because it has no more storage space available, the Premium Times reported.