Saudi energy minister coy over oil output cuts

Saudi Arabi’s energy minister Khalid Al Falih told reporters to wait for the results of this week’s OPEC meeting in Vienna, after being quizzed about how long global oil producers might extend their system of output cuts.

Speaking at the Gulf Petrochemicals & Chemicals Association Annual Forum in Dubai today (Tuesday), the minister hinted as difficulties ahead at the meeting of the Organisation of the Petroleum Exporting Countries in the Austrian capital on Thursday.

“I haven’t reached Vienna. It is too early to talk about a disagreement, but… according to studies there are differences over the amount of time we need to reach normal levels of stocks,” he said.

“What is a normal level of stocks? This is a technical matter and this needs talks with other parties.

“The only solution is to wait until we reach Vienna and hear the committee that will be convened tomorrow for surveillance and headed by the Kuwaiti and Russian oil ministers. We will hear everyone and reach a solution that is agreeable for both producer and consumer markets.”

Meanwhile, the UAE’s energy minister Suhail bin Mohammed Al Mazroui, said that talks are expected to be tougher than usual, with concerns that OPEC’s efforts to rebalance the oil market might instead create a global deficit.

“It will not be an easy meeting and we always look at various scenarios,” he said.

OPEC, Russia and nine other oil producers are cutting output by around 1.8 million barrels per day until March last year, and will discuss an extension to the deal on Thursday.

Reuters reports that the market had largely expected OPEC to prolong the cuts to the end of 2018, but that doubts have emerged in the last few days with Saudi Arabia signalling that it wants oil to trade at about $60 per barrel as the kingdom prepares to list shares in national oil champion Aramco.