OPEC, Russia rebuff Trump's call for increase in oil output to cool market

OPEC's leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, ruled out on Sunday any immediate, additional increase in crude output, effectively rebuffing US President Donald Trump's calls for action to cool the market.

"I do not influence prices," Saudi Energy Minister Khalid al-Falih told reporters in Algiers ahead of a meeting of OPEC and non-OPEC energy ministers.

Benchmark Brent oil reached $80 a barrel this month, prompting Trump to reiterate on Thursday his demand that the Organization of the Petroleum Exporting Countries lower prices.

The price rally mainly stemmed from a decline in oil exports from OPEC member Iran due to fresh US sanctions.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push

for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!" Trump wrote on Twitter.

Falih said Saudi Arabia had spare capacity to increase oil output but no such move was needed at the moment.

"My information is that the markets are adequately supplied. I don't know of any refiner in the world who is looking for oil and is not able to get it," Falih said.

Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as US sanctions on Iran were creating new challenges for oil markets.

Trump's statement was not his first criticism of OPEC.

Higher gasoline prices for US consumers could create a political headache for Republican Trump before mid-term congressional elections in November.

Iran, OPEC's third-largest producer, has accused Trump of orchestrating the oil price rally by imposing sanctions on Tehran and accused its regional arch-rival Saudi Arabia of bowing to US pressure.

On Sunday, Iranian oil minister Bijan Zanganeh said Trump's tweet "was the biggest insult to Washington's allies in the Middle East".

OPEC OUTPUT FALLS AGAIN

Seeking to reverse a downturn in oil prices that began in 2014, OPEC, Russia and other allies decided in late 2016 to reduce supply by some 1.8 million barrels per day (bpd).

In June this year, however, after months of cutting by more than their pact had called for, largely due to involuntary reductions from Venezuela and other producers, they agreed to

boost output by returning to 100 per cent compliance.

That equates to an increase of about 1 million bpd, but the latest figures show they are some way from achieving that target.

In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the US sanctions deadline.

Falih said returning to 100 per cent compliance was the main objective and should be achieved in the next two to three months.

Although he refrained from specifying how that could be done, Saudi Arabia is the only oil producer with significant spare capacity.

"We have the consensus that we need to offset reductions and achieve 100 per cent compliance, which means we can produce significantly more than we are producing today if there is demand," Falih said.

"The biggest issue is not with the producing countries, it's with the refiners, it's with the demand. We in Saudi Arabia have not seen demand for any additional barrel that we did not produce."



...But cartel predicts rise in production
 
The Opec oil cartel raised its global production forecast on Sunday based on higher-than-predicted US output in a report outlining a long-term rise in net demand, particularly in developing countries. In its annual World Oil Outlook, the Organisation of Petroleum Exporting Countries forecast world supply of all hydrocarbons (primarily oil and liquified natural gas) would rise from a current 98.4 million barrels per day (mbd) to 104.5 million by 2023, and 111.9 million by 2040. The figures are higher than last year's forecast, with rising production in non-cartel states led by the US a major factor. Non-member production overall is forecast to rise by 8.6 mbd to 66.1 mbd by 2023 on higher global demand, the report added, but a relative tapering off from 2020 will see members’ crude production shrug off a medium-term trend fall, Opec predicted.     AFP/PTI