Keeping crude oil output at current levels could be justified as the oil market would balance itself in 2017 even if producers did not intervene, believes Saudi Arabia's energy minister Khalid al-Falih who said this on Sunday.
The Organizaiotn of Petroleum Exporting Countries would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008 under a preliminary agreement reached in September in Algeria.
OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output and OPEC oil ministers meet in Vienna on Wednesday in an effort to finalize that deal.
Saudi Arabia was sticking to its position on the Algiers agreement that everyone should cooperate, Falih said on Sunday.
"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 OPEC intervention aims to expedite this balance and the market recovery at a faster pace," he said.
However Falih said: "The level of demand for Saudi crude is still high and very healthy," when asked whether Saudi Arabia was keeping its output high in November at around 10.6 million barrels per day.
"Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the oil 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 OPEC 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 oil giant Saudi Aramco, did not elaborate on Saudi Arabia's planned production levels.
after Saudi Arabia declined to attend a meeting between OPEC and non-OPEC producers was originally due to be held on Monday this week and that meeting was consequently called off.
Falih said on Sunday this was because no agreement within OPEC had been reached so far.
On the other hand, as doubts re-emerged over the ability of major producers to agree output cuts at a planned meeting on Wednesday aimed at reining in global oversupply, oil prices fell on Monday, adding to Friday's steep losses.
Following disagreement between OPEC and non-OPEC crude exporters like Russia over who should cut production by how much in order to curb a global supply overhang that has more than halved prices since 2014, there was fall of more than 3 percent on Friday in price of crude.
"An agreement is needed to avoid (price) downside. So, the question is what kind of agreement will they do? The market is clearly very nervous... We shall see. I think they will reach some form of agreement," said Oystein Berentsen, managing director for crude at oil trading firm Strong Petroleum in Singapore.
(Source:www.cnbc.com & www.reuters.com)
The Organizaiotn of Petroleum Exporting Countries would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008 under a preliminary agreement reached in September in Algeria.
OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output and OPEC oil ministers meet in Vienna on Wednesday in an effort to finalize that deal.
Saudi Arabia was sticking to its position on the Algiers agreement that everyone should cooperate, Falih said on Sunday.
"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 OPEC intervention aims to expedite this balance and the market recovery at a faster pace," he said.
However Falih said: "The level of demand for Saudi crude is still high and very healthy," when asked whether Saudi Arabia was keeping its output high in November at around 10.6 million barrels per day.
"Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the oil 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 OPEC 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 oil giant Saudi Aramco, did not elaborate on Saudi Arabia's planned production levels.
after Saudi Arabia declined to attend a meeting between OPEC and non-OPEC producers was originally due to be held on Monday this week and that meeting was consequently called off.
Falih said on Sunday this was because no agreement within OPEC had been reached so far.
On the other hand, as doubts re-emerged over the ability of major producers to agree output cuts at a planned meeting on Wednesday aimed at reining in global oversupply, oil prices fell on Monday, adding to Friday's steep losses.
Following disagreement between OPEC and non-OPEC crude exporters like Russia over who should cut production by how much in order to curb a global supply overhang that has more than halved prices since 2014, there was fall of more than 3 percent on Friday in price of crude.
"An agreement is needed to avoid (price) downside. So, the question is what kind of agreement will they do? The market is clearly very nervous... We shall see. I think they will reach some form of agreement," said Oystein Berentsen, managing director for crude at oil trading firm Strong Petroleum in Singapore.
(Source:www.cnbc.com & www.reuters.com)