Saudi oil min­is­ter says pro­duc­tion cuts may need to con­tinue

Malta Independent - - BUSINESS CLASSIFIEDS -

Saudi Ara­bia's oil min­is­ter on Thurs­day sug­gested that pro­duc­tion cuts agreed to by OPEC mem­bers and coun­tries out­side of the car­tel may need to con­tinue to help shore up crude oil prices.

The com­ments by Khalid alFalih carry sig­nif­i­cant weight as the king­dom is one of the world's top oil pro­duc­ers. They come as the price per bar­rel stand above $50 and in­creases in U.S. shale oil pro­duc­tion threaten to keep them low.

"There is an ini­tial agree­ment but it has not been com­mu­ni­cated to all the coun­tries yet that we might be forced to ex­tend in or­der to reach our goal," al-Falih said in a speech at an oil con­fer­ence in Abu Dhabi, the cap­i­tal of the United Arab Emi­rates.

OPEC agreed in late Novem­ber to cut its pro­duc­tion by 1.2 mil­lion bar­rels a day for six months, its first cut since 2008. Nearly a dozen other coun­tries in­clud­ing Rus­sia pledged in De­cem­ber to cut an ad­di­tional 558,000 bar­rels a day.

Crude oil sold for over $100 a bar­rel in the sum­mer of 2014, be­fore bot­tom­ing out be­low $30 a bar­rel in Jan­uary 2016.

Sig­nif­i­cant wild cards re­main, how­ever. Pres­i­dent Don­ald Trump has pledged to free up more oil drilling in the United States. The global econ­omy re­mains weak as well. Mean­while, shale oil pro­duc­tion has started grow­ing again in the U.S. while Iran rushes to pro­duce as much as it can to make up for years of eco­nomic sanc­tions it suf­fered over its con­tested nu­clear pro­gram.

Talk­ing about shale, Emi­rati En­ergy Min­is­ter Suhail al-Mazroui said pro­duc­ers in­volved in the cut made the de­ci­sion "be­cause we care about the bal­ance in the mar­ket."

"This sac­ri­fice can­not be taken as a sac­ri­fice where some­one else can ben­e­fit 100 per­cent," he said.

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