Oil inventory drawdown to accelerate in 3-4 months, says Al-Falih

ASTANA: A drawdown in crude oil inventories will accelerate in the next three to four months, Saudi Energy Minister Khalid Al-Falih said on Sunday.

Al-Falih, speaking to reporters in the Kazakh capital of Astana, also said Saudi Arabia planned to grow exports to the US in the long-term.

“The US market will always be key (to us), in the long term we will continue and grow exports to the US, today the US is well supplied,” Al-Falih told a briefing.

On Saturday, the Saudi energy minister said: “There is no evidence a pact by global oil producers to curb output needs to be adjusted.”

Al-Falih also said the decision by Saudi Arabia and some of its allies to cut ties with Qatar this week would not affect the oil pact.

“I do not expect the diplomatic and political issues that have surfaced with Qatar to have any impact whatsoever on the oil production agreement,” he told reporters in Kazakhstan.

US data this week showed a surprise 3.3-million-barrel build in crude stocks to 513.2 million barrels. Inventories of refined products also rose, despite the start of the peakdemand summer season.

US production is also increasing. Drillers added eight oil rigs in the week to Friday bringing the total count to 741, the most since April 2015, energy services firm Baker Hughes said on Friday. The Saudi energy minister said that the data was a “local phenomenon.”

“Time will correct for this statistical glitch that we saw last week,” Al-Falih said, adding that the results of last month’s agreements to extend a global production cut would “materialize over weeks and months.”

“I am convinced that the overall trend for the market is that of rebalancing,” he said.