OPEC MAY EXTEND OUTPUT CURBS TO BEYOND 2017
Producers determined to hit goal of cutting bloated stockpiles, says Saudi oil minister
SAUDI Arabia’s oil minister said he’s confident that an agreement by producers to curb crude output and shrink a market glut would be extended into the second half of the year and possibly beyond.
While United States shale output growth and the shutdown of refineries for maintenance had slowed the impact of cuts by Organisation of the Petroleum Exporting Countries (Opec) and its partners, producers were determined to reach their goal of reducing bloated stockpiles, said Khalid Al-Falih at the Asia Oil and Gas Conference, here, yesterday.
He said he was confident the global oil market would soon rebalance and return to a “healthy state”.
Surging US production has raised concern that Opec and partners are failing to reduce an oversupply and prop up prices. Oil has surrendered all its gains since their deal late last year to cut output and with Opec meeting in Vienna later this month, several nations have said they’d support an extension of the sixmonth agreement that began in January.
This is the first time the Saudi minister has suggested it could be extended beyond this year.
“Based on the consultations I have had with participating members I am confident the agreement would be extended into the second half of the year and possibly beyond,” said Al-Falih.
“The coalition was determined to do whatever it takes to achieve the target of bringing stock levels back to the five-year average.”
West Texas Intermediate crude rose one per cent to US$46.66 (RM205.3) a barrel by 2.14pm Singapore time on the New York Mercantile Exchange.
Brent, the benchmark for more than half the world’s oil, was up one per cent at US$49.60 on the London-based ICE Futures Europe exchange.
Both are still more than 50 per cent below their peaks in 2014, when the US shale boom exacerbated a market glut and triggered the biggest price crash in a generation. Bloomberg
Surging United States shale output has raised concerns that Organisation of the Petroleum Exporting Countries and partners are failing to reduce an oil oversupply.