Algeria reduced its oil production of 24,000 to 25.000 barrels from January,1, 2019. Thus, the loss of oil revenues will be $1.5 million, while the monthly loss will reach $45 million.
The total loss, which is a reflection of the decision to cut production daily over the period of the agreement will exceed a quarter billion dollars, as it will reach $270 million, by adopting the average price of a barrel at the limit of $ 60.
The total loss, which is a reflection of the decision to cut daily production over the period of the agreement will exceed a quarter billion dollars, as it will reach $270 million, by adopting the average price of a barrel at the limit of $60.
Algeria showed, earlier this month its commitment to an agreement to reduce its oil production as a precautionary measure to keep the price of oil at acceptable levels.
Vice president of exploration and production at Sonatrach, Saleh Makmouche, officially announced, on Monday, that Algeria has started to reduce production of 24,000 to 25.000 barrels per day in early January, under the agreement reached in Vienna in 2018 between OPEC members and its producers from outside the organization, which will be extended to next June.
Algeria’s decision to reduce oil production will automatically reduce its daily and monthly revenues. Sources within the oil company told Echorouk that the agreement will lead to a loss of daily revenues of $ 1.5 million, while the total loss of Algeria as a result of the OPEC agreement will reach $270 million by the end of next June, which are the terms of the agreement if the price of $60 per barrel of oil is adopted.
Algeria’s commitment to reduce its production follows its 1.08 million barrels per day production, knowing that Algeria has one of the lowest levels of production within OPEC, which would make Algeria’s loss less than that of other producing countries.
The decision comes to implement the OPEC agreement with non-member producing countries last December to reduce oil production by 1.2 million barrels per day from January,1, 2019 for an initial period of 6 months, that is, until the end of June.
Under the deal, OPEC’s 15 member states will cut 800,000 barrels per day (bpd) while the 10 OPEC partners will cut 400,000 bpd in the hope of keeping oil prices at acceptable levels and contributing to the recovery of supply-saturated markets.
It should be noted that the Saudi Oil Minister, Khalid Al-Faleh, announced that Riyadh reduces its oil exports from January to 10% compared to November in order to stabilize the market.
For his part, the Russian Oil Minister, Alexander Novak, announced that his country started reducing the level of production, saying that the size of the reduction could be 50.000 bpd by the end of this month compared to 30.000 bpd currently.
Oil markets recorded a 1% drop in prices, on Monday, at the beginning of the weekly dealings, with Brent crude futures drop in early trading with 60 cents and by 1% from the previous settlement price to reach $ 59.88 per barrel.
Oil price per barrel fell to reach $ 59.70, losing $ 0.78 and 1.29%. In contrast, the West Texas Intermediate (WTI) futures contract fell from 59 cents and 1.1% from the previous level to $ 51 a barrel. It continued its decline to reach $ 50.82 with a loss of $ 0.77 and 1.49%.
Last Friday, oil prices fell by about 2%, in last week’s dealings, where Brent crude fell by $1.2 and 1.95% to settle at $60.48 a barrel, while US crude fell by $1, 1.9% to reach $ 51.59 per barrel.