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Saudi rules out Opec+ supply cuts, says US and China will spur oil demand

US, China to spur oil demand, supply cuts not on Opec anvil:

Reuters  |  New Delhi 

Khalid al-Falih
Khalid al-Falih

Saudi said on Sunday it would be too early to change OPEC+ output policy at the group's meeting in April and that and the US would lead healthy global demand for this year.

The Organization of the Exporting Countries and its allies such as -- known as the OPEC+ alliance -- will meet in on April 17-18, with another gathering scheduled for June 25-26.

Falih said the group was unlikely to change its output policy in April and if required would make adjustments in June.

"We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward," Falih said.

"We will see where the market is by June and adjust appropriately," Falih said after a meeting with Indian in

member (UAE) said on Sunday it would continue to meet its obligations to cut supply under the agreement.

"We will continue to deliver on the & Non-commitment for voluntary production adjustments until the global market is re-balanced," of and Industry said on

On Jan. 1, OPEC+ began new production cuts to avoid a supply glut that threatened to soften prices. The group agreed to reduce supply by 1.2 million barrels per day (bpd) for six months.

Sources recently said the most likely scenario is that the current supply cuts will be extended in June but much depends on the extent of U.S. sanctions on OPEC members and

OPEC's share of the cuts is 800,000 bpd, to be delivered by 11 members -- all except Iran, and Venezuela, which are exempt. The baseline for the reduction was in most cases their output in October 2018.

For Saudi Arabia, the world's top oil exporter, Falih said output in April was expected to remain at this month's level of 9.8 million bpd.

"is finalising their April allocations today or tomorrow so we will know more on Monday. But my expectation is that April is going to be pretty much like March".

GLOBAL OIL DEMAND

Falih said total global is set to grow by around 1.5 million bpd this year.

"If you look at alone you would panic, if you look at the U.S. you would say the world is awash with oil. You have to look at the market as a whole. We think 2019 demand is actually quite healthy," Falih told

In Venezuela, suffering from a political and economic crisis, have plunged 40 percent to around 920,000 bpd since slapped sanctions on its industry on Jan. 28.

On the other hand, production in U.S. hit a record of more than 12 million bpd in February.

The International Agency last month left its demand growth forecast for 2019 unchanged from January at 1.4 million barrels per day.

Falih said Chinese demand was breaking records month after month and estimated the country would breach 11 million bpd this year.

He also said that along with and the U.S., India's expanding economy was driving global growth.

After the meeting, India's said he wanted to play an active role in keeping at a reasonable level as rising prices affect the Indian economy.

He also invited to partner with in building strategic and further invest in India's refining and Petrochemical sectors.

 

(Reporting by Nidhi Verma; Editing by Kirsten Donovan)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, March 11 2019. 07:27 IST
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