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Saudi leaning towards oil production cuts after US tells OPEC to 'relax'

Falih said it was hard to foresee the situation in June when the agreement between major oil producers, including Russia, expires

AFP | PTI  |  Riyadh 

Opec, crude oil
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The Saudi minister said Wednesday he is leaning towards extending oil production cuts in the second half of 2019, despite US Donald Trump's demand to keep prices down.

cartel countries and other major in January began implementing a six-month deal to cut output by 1.2 million barrels per day to shore up sagging prices.

The deal has pushed prices higher but so far failed to boost them to their multi-year peak of USD 85 a barrel reached in October, triggering speculation of an extension of the deal to cut production.

"We remain flexible. I am leaning towards the likelihood of an extension in the second half" of this year for the output cuts, Khalid al-Falih, minister of the world's top crude exporter Saudi Arabia, told CNBC television in

His comments come just two days after Trump criticised the producer group for rising crude prices.

"getting too high. OPEC, please relax and take it easy," Trump tweeted on Monday.

"World cannot take a price hike - fragile!" Responding to the tweet, Falih said: "We are taking it easy." "The 25 countries are taking a very slow and measured approach... We are interested in market stability first and foremost," he added.

Falih said it was hard to foresee the situation in June when the agreement between major oil producers, including Russia, expires.

"All of the outlooks that I have seen we'll need to moderate production in the second half of this year, but you never know," he said.

production fell to a four-year low in January as the cartel, and its unofficial leader Saudi Arabia, applied the new pact to shore up prices, the Agency said this month.

Trump has frequently called for to keep production high to limit rising that stem economic growth.

crashed in mid-2014 to below USD 30 a barrel, down from over USD 100 a barrel, due to a glut in supplies and weakening global demand.

Speaking at a symposium organised by the Riyadh-based Energy Forum, Falih said a lack of adequate investments in oil and gas, which OPEC estimates at USD 11 trillion by 2040, would see supplies fall short of demand.

"OPEC and our non-OPEC partners, led by Russia, continue to play their role in helping to balance the market," the minister said.

"But sustaining that role requires timely investments, reliable supply, and appropriate spare capacity," he added.

First Published: Wed, February 27 2019. 21:05 IST
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