Saudi Arabia slashes output on low demand

Output cut: Saudi Arabia looks to shore up prices as demand shrinks

SCANPIX/REUTERS/Dani Cardona (SPAIN)

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By News wires

 11 January 2013 16:45 GMT

Saudi Arabia has cut oil production substantially, moving to fend off a growing overhang in world oil supply and defend prices well above $100 a barrel, according to a report.

In the last two months of 2012, Opec's lead producer responded to slower demand by lowering supply by around 700,000 barrels per day, with output in December falling to around 9 million bpd, an industry source familiar with Saudi policy told Reuters.

That's more than 1 million bpd below peak production last summer. Market sources say the world's largest exporter may need to drop below the 9 million bpd mark for the first time since May 2011 as rising supply elsewhere outpaces demand, the news wire reported.

Core Gulf Opec producers Kuwait and the United Arab Emirates have shown…

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