Saudi en­ergy min­is­ter con­cerned about oil price volatil­ity

The Punch - - INTERNATIONAL BUSINESS -

SAUDI Ara­bia’s en­ergy min­is­ter said Sun­day that ma­jor oil pro­duc­ers need to do bet­ter to nar­row swings in prices that dip below $60 a bar­rel and rise above $86, ac­cord­ing to the As­so­ci­ated Press.

“i think what we need to do is nar­row the range ... of volatil­ity,” Khalid al-falih said.

“We need to do bet­ter and the more pro­duc­ers that work with us, the bet­ter we’re able” to do so, he told the At­lantic Coun­cil’s Global En­ergy Fo­rum in Abu Dhabi.

Cau­tious not to set a price tar­get or range, he ex­plained there are con­se­quences when oil prices dip too low or rise too high.

Last month, OPEC coun­tries, in­clud­ing Saudi Ara­bia, and other ma­jor oil pro­duc­ers agreed to cut pro­duc­tion by 1.2 mil­lion bar­rels a day to re­duce over­sup­ply and boost prices for the first six months of 2019.

Oil pro­duc­ers are un­der pres­sure to re­duce pro­duc­tion fol­low­ing a sharp fall in oil prices in re­cent months be­cause ma­jor pro­duc­ers — in­clud­ing the United States — are pump­ing oil at high rates.

Brent crude, the in­ter­na­tional stan­dard, traded at $60.48 a bar­rel in Lon­don on Fri­day. Benchmark US crude stood at $51.59 a bar­rel in New York.

An­a­lysts say the king­dom needs oil be­tween $75 and $80 a bar­rel to bal­ance its bud­get, with spend­ing for this year to reach a record high of $295bn.

Speak­ing to re­porters on the side­lines of the fo­rum, al-falih said that de­spite con­tin­ued con­cerns over the volatil­ity in price seen in the fourth quar­ter of 2018, he is hope­ful it can be brought un­der con­trol.

“i think early signs this year are pos­i­tive,” he said.

Last week, Saudi Ara­bia an­nounced it has 268.5 bil­lion bar­rels of proven crude oil re­serves, a fig­ure 2.2 bil­lion bar­rels higher than pre­vi­ously known. The king­dom’s En­ergy Min­istry also re­vised up­ward the coun­try’s gas re­serves by around 10 per­cent, to 325.1 tril­lion stan­dard cu­bic feet as of the end of 2017.

The king­dom’s oil re­serves are among the cheap­est in the world to re­cover at around $4 per bar­rel.

Al-falih said the re­vi­sion, con­ducted as an in­de­pen­dent au­dit by con­sul­tants De­golyer and Mac­naughton, points to why the king­dom be­lieves state-owned oil gi­ant Saudi Aramco “is in­deed the world’s most valu­able com­pany.”

He said plans for an ini­tial pub­lic of­fer­ing of shares in Aramco in 2021 re­main on track.

•At­ten­dees wear­ing vir­tual re­al­ity head­sets on the DOF Ro­bot­ics Hur­ri­cane 360 mo­tion ride at the DOF Ro­bot­ics booth, on the last day of CES 2019, on Jan­uary 11, 2019 at the Las Ve­gas Con­ven­tion Cen­ter in Las Ve­gas, Ne­vada. Photo: AFP

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.