Published: Mon, July 01, 2019
Markets | By Otis Pena

Saudi Arabia's economy grows 1.66% in first quarter

Saudi Arabia's economy grows 1.66% in first quarter

Saudi Arabia's economy grew 1.66% in the first quarter, in line with expectations of a modest pick up as oil production cuts weigh on the world's top crude exporter, Trend reports citing Reuters.

Extending the OPEC+ deal to cut output by 1.2 mbd as well as reducing production by up to 1,800,000 barrels per day are the likely scenarios to be discussed during tomorrow's summit. "China trade talks at the G20, should allow oil prices to move higher", said Amrita Sen, chief oil analyst at consultant Energy Aspects London. His comments came ahead of next week's Opec+ gathering in Vienna where the group is meeting to decide on the crude production strategy in a bid to keep the market balanced.

Benchmark Brent crude has climbed more than 25% since the start of 2019.

The announcement comes as oil prices struggle amid a slowing global economy and increasing United States supplies of the commodity. As far as the length of the extension is concerned, we have to determine if it will be six or nine months. On Friday, Brent futures for September closed at $64.74 a barrel. "Maybe it will be nine months", Putin said after meeting with Saudi Crown Prince Muhammad bin Salman in Osaka. The Paris-based IEA watchdog has cut its forecast for 2019 oil demand-growth for a second straight month and has also trimmed its second-quarter forecast.

"Demand is softening a little bit, but I think it's still healthy", the Saudi minister said.

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For Moscow, there's an extra incentive to extend the curbs by nine months, as Russian oil companies struggle to raise production over the winter. Bijan Namdar Zanganeh, the Iranian oil minister, is scheduled to arrive in Vienna for talks with fellow members on Monday morning.

Ministers from the 14-nation Organization of the Petroleum Exporting Countries (Opec) meet in Vienna on Monday to discuss output, before gathering a day later for Opec+, a group of 24 oil-producing countries that includes Russian Federation.

"We'll think for how long [to extend it] - six or nine months", the Russian leader told journalists.

Opec+ nations are close to finalizing a "charter" for a long-term alliance, with a document likely to be signed as soon as this week, said two delegates. Saudi Arabia also unilaterally made deeper curbs, pumping 9.7 million barrels a day in May, compared with its OPEC+ ceiling of 10.3 million. Iran has denounced the sanctions as illegal and says the White House is run by "mentally retarded" people.

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