Saudi Arabia may need to persuade OPEC members to cut output to help keep oil prices above $100 level through the rest of the year, according to the Kingdom’s largest lender by assets National Commercial Bank.
Producers in the Organization of Petroleum Exporting Countries need to make the cuts in the second quarter and bring production to the current official target level of 30 million barrels a day, the Jeddah-based bank, known as NCB, said in an e-mailed report today.
“While Saudi Arabia has been willing to make large cuts to production in the past, its resolve to continue will be tested if other OPEC members raise their own production during 2013,” it said. Maintaining oil prices above $100 for the rest of 2013, “may prove to be a more difficult proposition than if the Kingdom were to act unilaterally as in the recent past,” it said.
OPEC’s 12 members pumped 30.5 million barrels a day of crude in May, according to the group’s latest monthly market report published May 10. The group, which supplies about 40 percent of the world’s oil, has an official production ceiling of 30 million barrels. Demand for crude from OPEC will average 29.8 million barrels a day in 2013, it said.