Despite Saudi Arabia's assurances that the oil production disrupted by recent drone attacks will be fully restored in weeks, rating agency Moody's has cut its forecast for the kingdom’s economic growth in 2019, not so much due to the disruptions in production than lower oil output stemming from the kingdom's overcompliance with its OPEC quota.

Moody's has cut the 2019 growth forecast for world’s biggest oil exporter to 0.3 percent from its previous projection of 1.5 percent.

"We have revised down our growth forecast for Saudi Arabia," said Alexander Perjessy, senior analyst at the ratings agency.

"Given the context that OPEC production cut will be extended through the end of the year and Saudi's overcompliance with the quota by about 5 percent, we estimate that crude oil production from Saudi Arabia will average roughly 9.7 million barrels per day and that will reduce the overall GDP growth to 0.3 percent  from our previous forecast of 1.5 percent," Perjessy said.

Saudi's new energy minister Prince Abdulaziz bin Salman had assured that production cuts co-ordinated with OPEC and Russia would remain in place.

Moody's doesn't expect the oil production disrupted due to recent drone attacks to be fully restored before 15 days.

(Writing by Seban Scaria, seban.scaria@refinitiv.com, editing by Anoop Menon)

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2019