Oil at $55 ‘good for producers’
Oil Minister Essam Al Marzooq says he’s not surprised prices have fallen this year
Oil at $50 to $55 a barrel would put producers in a “good position” with stockpiles expected to fall later this year, according to Kuwait’s Oil Minister Essam Al Marzouq.
“I think if we can retain $50 to $55 throughout 2017 I think we will be in a good position,” Al Marzouq said from Kuwait City. Brent crude has dropped 11 per cent this year.
Al Marzouq said he’s not surprised prices have fallen this year. Despite the cut in production by Opec and other major producers since January, US inventories have actually climbed because of refinery maintenance, and slow demand in the first quarter, he said. Kuwait A pledge by crude producers to consider extending their output-cut deal failed to excite oil bulls, with prices dropping as more time was seen needed to trim swollen global stockpiles. Futures lost as much as per cent 1.3 per cent in New York, after falling for a third week this month as rising US supplies offset the effect of output curbs by other producers. Five Opec nations joined with non-member Oman to voice support for prolonging cuts past June, with Kuwait saying it should be for an additional six months. Russia said it needs more time. West Texas Intermediate for May delivery dropped as much as 63 cents to $47.34 a barrel on the New York Mercantile Exchange and was at $47.66 as of 12:55pm London time. joined Opec’s biggest producer Saudi Arabia in saying oil inventories need to fall to the fiveyear average. They now stand about 285 million barrels above that, Al Marzouq said. If Opec and 11 other producers that agreed to reduce output reach their targeted cuts, inventories should fall to the five-year average by the end of the third quarter, he said. Compliance was 94 per cent in February, according to the monitoring committee headed by Al Marzouq.
The ministerial committee of Opec ministers from Kuwait, Algeria and Venezuela and their counterparts from Russia and Oman concluded meetings in Kuwait City on Sunday with a statement asking Opec to review the market and give them a recommendation in April on rolling over the cuts.