Norway's Oil Ministry: The country will cut oil output

Oil is higher on the day (WTI +17%) and it has just been underpinned by the latest news that Norway will cut production.

In an official statement from the Norwegian government released on Wednesday, it states that "the corona pandemic and the efforts to contain it in large parts of the world have had substantial impact on economic activity globally and thereby also for oil demand."

"In the current unprecedented situation cuts in oil production introduced by the government will contribute to a faster stabilisation of the oil market compared to letting the rebalancing take place only through the market mechanism."

Read the full statement here

• Key notes (Reuters)
• To cut output by 250,000 barrels of oil equivalent per day in June, 134,000 bpd in H2 2020. 
• Start-up of production of several fields will be delayed until 2021.
• Consequently, total Norwegian production in December 2020 will be 300,000 barrels less per day than originally planned by the companies.
• Regulation will cease by the end of the year.
• Basis for the regulation is a reference production of 1,859,000 barrels of oil per day.
• thus, a cut of 250,000 barrels per day in June 2020 gives an upper limit for oil production on the Norwegian continental shelf of 1,609,000 barrels per day in June.
• In the second half of 2020 upper limit for oil production on the Norwegian continental shelf will be 1,725,000 barrels per day.
• Ministry says gas fields are exempt.
• Cut will not affect Norwegian gas production or Norwegian gas exports.
• Ministry says throughout the second half of 2020, oil demand is expected to grow gradually as economic activity is resumed.

We are currently facing an unprecedented situation in the oil market. Both producers and consumers benefit from a stable market. We have previously stated that we will consider a cut in Norwegian production if several big producing countries implement significant cuts.

The decision by the Norwegian Government to reduce Norwegian oil production has been made on an independent basis and with Norwegian interests at heart, says Minister of Petroleum and Energy, Tina Bru

– the official statement said.

WTI levels