Falih: Oil down cy­cle ‘near­ing end’, views are closer with Rus­sia

Saudi looks to Rus­sia to boost non-OPEC co­op­er­a­tion

Kuwait Times - - FRONT PAGE -

RIYADH: Saudi Oil Min­is­ter Khalid Al-Falih said yes­ter­day that the cur­rent cy­cle of fall­ing crude prices is close to an end as mar­ket fun­da­men­tals im­prove. Oil prices are cur­rently hov­er­ing at around $50 per barrel after hit­ting a 10-year low of less than $30 in Jan­uary, down from a peak of more than $100 in mid-2014.

“The cur­rent down cy­cle is near­ing an end,” Falih told a joint press con­fer­ence with his Rus­sian coun­ter­part Alexan­der No­vak yes­ter­day after a Gulf min­is­te­rial meet­ing in Riyadh. “Mar­ket fun­da­men­tals, in terms of sup­ply and de­mand, have be­gun to im­prove,” Falih said, adding: “We are op­ti­mistic that oil prices will con­tinue to im­prove in the fu­ture.” Falih said he had in­vited his Rus­sian coun­ter­part Alexan­der No­vak to meet Gulf Arab en­ergy min­is­ters in Riyadh as part of ef­forts to co­op­er­ate with non-OPEC mem­bers to sta­bi­lize the oil mar­ket.

“Rus­sia is one of the world’s big­gest oil pro­duc­ers ... and is one of the in­flu­en­tial par­ties in the sta­bil­ity of the oil mar­ket,” Falih said at the open­ing ses­sion of the six-mem­ber Gulf Co­op­er­a­tion Coun­cil (GCC). Falih said No­vak had wel­comed the in­vi­ta­tion, “as a clear in­di­ca­tion of sin­cere de­sire to con­tinue co­op­er­a­tion and co­or­di­na­tion with the oil pro­duc­ing and ex­port­ing coun­tries for more sta­bil­ity in the mar­ket.”

No­vak had said on Fri­day he would take “some” pro­pos­als to the meet­ing in Riyadh. Last month in Al­giers, the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries agreed mod­est oil out­put cuts. The goal is to cut production to a range of 32.50-33.0 mil­lion bar­rels per day (bpd).

“The Al­ge­ria meet­ing last month was suc­cess­ful in push­ing the path of co­op­er­a­tion be­tween oil pro­duc­ing and con­sum­ing coun­tries and in­cluded im­por­tant talks be­tween ex­perts from OPEC coun­tries and out­side of OPEC about oil mar­kets,” Falih said call­ing on his Gulf en­ergy coun­ter­parts to work to­gether as a bloc. Falih also said that the low oil price en­vi­ron­ment had led to a de­crease in in­vest­ments which could lead to a short­age in sup­ply in the fu­ture and have a neg­a­tive ef­fect on the global econ­omy.

Qatar’s en­ergy min­is­ter, Mo­hammed AlSada, whose coun­try holds the ro­tat­ing pres­i­dency of the OPEC oil ex­port­ing car­tel, also said the “dif­fi­cult phase is over”.

“Although the mar­ket is head­ing to be­ing bal­anced, it needs our joint ef­fort, and we all agreed that we need to take mea­sures to bring back this bal­ance,” he said. No­vak said he and his Gulf coun­ter­parts had dis­cussed ways to “de­velop the best mech­a­nism to solve the is­sue of sta­bi­liza­tion”. “We have reached an un­prece­dented level in our re­la­tions and co­op­er­a­tion” with Saudi Ara­bia, he told re­porters, adding that he agreed with Falih “to con­tinue to work and re­main in con­tin­u­ous con­tact to achieve... con­crete mech­a­nisms”. OPEC has in­vited Rus­sia and key non-mem­bers to a meet­ing later this month as the car­tel and Mos­cow seek to tighten co­op­er­a­tion to boost his­tor­i­cally low crude prices. The in­vi­ta­tion was an­nounced after a meet­ing be­tween top OPEC en­ergy min­is­ters and No­vak in Is­tan­bul, aimed at ad­vanc­ing joint ef­forts to bol­ster oil prices whose lows have hurt the highly de­pen­dent economies of crude pro­duc­ers. The car­tel and Rus­sia will meet to­day, ahead of the OPEC tech­ni­cal meet­ing in Vi­enna on Oc­to­ber 28-29, to which Rus­sia and oth­ers have been in­vited.

Last month at a meet­ing in Al­giers, the car­tel agreed its first production cut in eight years, although it re­mains to be seen how this will be com­plied with and im­ple­mented.

Pres­i­dent Ni­co­las Maduro of OPEC mem­ber Venezuela was in Riyadh yes­ter­day for talks a day after call­ing in Iran for in­creased co­op­er­a­tion be­tween oil-rich na­tions to sta­bi­lize prices. Maduro, who is also due to visit Qatar on a Mid­dle East tour, cur­rently faces an eco­nomic and po­lit­i­cal cri­sis at home, com­pounded by the col­laps­ing price of oil.

Saudi Oil Min­is­ter Khalid Al-Falih

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