* Saudi output falls below 10 mln bpd
* Plans to make further cuts in February
* Expects market to tighten in 2-3 years
By Rania El Gamal, Maha El Dahan and Stanley Carvalho
ABU DHABI, Jan 12 Saudi Arabia has cut oil
output to its lowest in almost two years, its energy minister
said on Thursday, as the world's largest oil exporter leads
OPEC's drive to eradicate a global glut and prop up prices.
Energy Minister Khalid al-Falih said output had fallen below
10 million barrels per day - more than it had promised as part
of a global output cut deal between OPEC and non-OPEC producers.
Such low levels were last seen in February 2015, when Riyadh
began to steeply raise production to deal a blow to U.S. shale
oil producers, effectively becoming the architect of a prolonged
oil price crash.
Falih, speaking at the Atlantic Council Global Energy Forum
in Abu Dhabi, said output was "not significantly below" 10
million bpd currently and the Kingdom planned to make even
deeper cuts in February.
This means Saudi Arabia has cut oil production by more than
the 486,000 bpd it agreed to late last year under a global deal
to curb production and stem a fall in oil prices.
Falih also said he expected the oil market to tighten in two
to three years, aided by the agreement of OPEC and non-OPEC
producers late last year to curb production.
"We have been moving towards rebalancing the markets for
some time," Falih said.
"Even better, the pace of rebalancing will be accelerated by
recent production agreements within OPEC and outside. I have
confidence in these agreements to bring stability to the global
Falih predicted oil demand would grow by over 1 million
barrels a day this year.
"I am confident that the combination of capping production
by 25 countries and growth of demand will continue to balance
and prices will respond accordingly," he added.
OPEC and non-OPEC producers last month reached their first
deal since 2001 to curtail oil output jointly by nearly 1.8
million bpd to help stem a fall in oil prices and ease a supply
While Falih said he did not have a specific oil price
target, Iraqi oil minister Jabar Ali al-Luaibi told reporters at
the same event Iraq wanted to see prices of around $65 a barrel.
Brent crude prices were up 77 cents at $55.87 a
barrel by 1230 GMT.
Luaibi said Iraq had slashed its exports by 170,000 bpd and
was cutting them further by 40,000 bpd this week. He said Iraq
was committed to the success of the production-cut agreement
"even though it should have been exempted".
OPEC expects global oil inventories to fall by the second
quarter of this year in response to the agreement, OPEC
Secretary-General Mohammed Barkindo said.
Kuwait has cut its oil exports by more than 133,000 bpd
mainly to customers in North America and Europe while
maintaining full exports to Asia, Kuwaiti Oil Minister Essam
(Writing by Ahmad Ghaddar; editing by Susan Thomas)