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Oil market would balance even without output cuts, says Saudi's energy minister

OPEC wants non-OPEC producers such as Russia to support the intervention by curbing their output

Reuters  |  Dhahran 

An oil refinery

Saudi Arabia's energy minister said on Sunday that he believed the market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

Under a preliminary agreement reached in September in Algeria, the Organization of the Petroleum Exporting Countries would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008.

ministers meet in Vienna on Wednesday in an effort to finalise that deal; also wants non-producers such as Russia to support the intervention by curbing their output.

Falih said on Sunday was sticking to its position on the Algiers agreement that everyone should cooperate.

"We expect the level of demand to be encouraging in 2017, and the market will reach balance in 2017 even if there is no intervention by OPEC. But intervention aims to expedite this balance and the market recovery at a faster pace," he said.

Asked whether was keeping its output high in November at around 10.6 million barrels per day, however, Falih said: "The level of demand for Saudi crude is still high and very healthy."

"Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the markets, it is a positive sign that makes us optimistic about the market recovery."

"I don't think that we have one path only in meetings, which is cutting production - I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States," he added.

Falih, speaking to reporters at the headquarters of national giant Saudi Aramco, did not elaborate on Saudi Arabia's planned production levels.

A meeting between and non-producers was originally due to be held on Monday this week, but it was called off after declined to attend; Falih said on Sunday this was because no agreement within had been reached so far.

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Oil market would balance even without output cuts, says Saudi's energy minister

OPEC wants non-OPEC producers such as Russia to support the intervention by curbing their output

OPEC wants non-OPEC producers such as Russia to support the intervention by curbing their output
Saudi Arabia's energy minister said on Sunday that he believed the market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

Under a preliminary agreement reached in September in Algeria, the Organization of the Petroleum Exporting Countries would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008.

ministers meet in Vienna on Wednesday in an effort to finalise that deal; also wants non-producers such as Russia to support the intervention by curbing their output.

Falih said on Sunday was sticking to its position on the Algiers agreement that everyone should cooperate.

"We expect the level of demand to be encouraging in 2017, and the market will reach balance in 2017 even if there is no intervention by OPEC. But intervention aims to expedite this balance and the market recovery at a faster pace," he said.

Asked whether was keeping its output high in November at around 10.6 million barrels per day, however, Falih said: "The level of demand for Saudi crude is still high and very healthy."

"Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the markets, it is a positive sign that makes us optimistic about the market recovery."

"I don't think that we have one path only in meetings, which is cutting production - I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States," he added.

Falih, speaking to reporters at the headquarters of national giant Saudi Aramco, did not elaborate on Saudi Arabia's planned production levels.

A meeting between and non-producers was originally due to be held on Monday this week, but it was called off after declined to attend; Falih said on Sunday this was because no agreement within had been reached so far.

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Business Standard
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Oil market would balance even without output cuts, says Saudi's energy minister

OPEC wants non-OPEC producers such as Russia to support the intervention by curbing their output

Saudi Arabia's energy minister said on Sunday that he believed the market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

Under a preliminary agreement reached in September in Algeria, the Organization of the Petroleum Exporting Countries would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008.

ministers meet in Vienna on Wednesday in an effort to finalise that deal; also wants non-producers such as Russia to support the intervention by curbing their output.

Falih said on Sunday was sticking to its position on the Algiers agreement that everyone should cooperate.

"We expect the level of demand to be encouraging in 2017, and the market will reach balance in 2017 even if there is no intervention by OPEC. But intervention aims to expedite this balance and the market recovery at a faster pace," he said.

Asked whether was keeping its output high in November at around 10.6 million barrels per day, however, Falih said: "The level of demand for Saudi crude is still high and very healthy."

"Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the markets, it is a positive sign that makes us optimistic about the market recovery."

"I don't think that we have one path only in meetings, which is cutting production - I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States," he added.

Falih, speaking to reporters at the headquarters of national giant Saudi Aramco, did not elaborate on Saudi Arabia's planned production levels.

A meeting between and non-producers was originally due to be held on Monday this week, but it was called off after declined to attend; Falih said on Sunday this was because no agreement within had been reached so far.

image
Business Standard
177 22