Kuwaiti oil minister says further oil production cuts are possible

Energy markets need regulator in face of speculators: Eni CEO

ST PETERSBURG, Russia, July 23, (RTRS): Kuwait’s Oil Minister Essam Al-Marzouq said on Saturday that compliance with oil production cuts by OPEC and nonOPEC countries is good and that deeper cuts are possible.

Asked about the possibility of further cuts to support the price of crude, the minister said: “Everything is open.”

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC producers will meet in the Russian city of St Petersburg on Monday to discuss the pact on cuts, which was reached earlier this year.

Marzouq also told reporters that a technical committee of OPEC and nonOPEC countries had heard and was happy with reports from Libya and Nigeria, and that discussions would continue on Monday.

Meantime, a rebalancing of the oil market is progressing more slowly than expected, but it will speed up in the second half of the year, OPEC’s SecretaryGeneral Mohammad Barkindo said on Sunday.

“We are pretty sure that the rebalancing process may be going at a slower pace than earlier projected, but it is on cours

It is bound to accelerate in the second half,” Barkindo told reporters in the Russian city of St Petersburg.

Barkindo cited strong oil demand growth, conformity with a global pact by OPEC and non-OPEC countries to cut output as well as an inventory draw in the United States as reasons why a rebalancing of the oil market would speed up.

Key OPEC and non-OPEC oil nations will discuss the situation in producers including Libya and Nigeria at a meeting on Monday, Russian Energy Minister Alexander Novak told reporters on Sunday.

Speculation has been swirling in oil markets that the meeting might ask Libya and Nigeria to join a production cutting deal from which they are currently exempt.

Six OPEC and non-OPEC ministers will meet on Monday in St Petersburg to discuss the market outlook and compliance with output cuts.

Novak also said Russian output had fallen by around 300,000 barrels per day since October.

Energy markets might need to be regulated to put a brake on widespread financial speculation that is distorting crude prices, the head of Italian oil major Eni told Il Sole 24 Ore newspaper.

Eni CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position to push prices higher by cutting output, adding that geopolitical tensions, growing US shale oil production and heavy speculation in crude futures were hurting the sector.

“The financial speculation is so strong that it has transformed even those with long term strategies into short term investors,” Descalzi was quoted as saying.

“Perhaps we should adopt in the oil sector the sort of regulations and market controls that were imposed on banks.

Banks have a central watchdog, while in the past, our regulator was OPEC, which is no longer playing the role it once had.”

He said hedge fund speculators no longer believed that the Organization of the Petroleum Exporting Countries (OPEC) was in a position to introduce radical output cuts.

Six OPEC and non-OPEC ministers are due to meet on Monday in St Petersburg to discuss the market outlook and review a global pact on reducing crude supplies that was agreed this year.

Asked if he thought further cuts might be decided, Descalzi said: “I am not optimistic.”