Saudi minister says premature to say if Opec+ to cut output

Three days after Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman sent crude prices surging with an agreement to extend co-operation on oil, the kingdom’s top energy official made clear that the terms of a deal remain unresolved.

In an interview with Bloomberg, Saudi Energy Minister Khalid al-Falih said he saw an oversupplied market, but cautioned that all the members of the Opec+ group, which includes allies such as Russia and Kazakhstan, needed to come together for a cut to go ahead.

Moscow backs output curbs “in principle,” but it’s “premature” to say what they will agree in Vienna this week, al-Falih said. He also walked back previous statements about the size of any supply reduction, saying the group is likely to cut but still needs to “figure out what needs to be done and by how much.”

Oil prices pared gains after his comments, which were less bullish than previous statements and signalled that divisions with Russia remain unresolved. Crude was trading 2.5% higher at $54.29 a barrel in New York, compared with an earlier increase of as much as 3%.

“We need to get together and listen to our colleagues, hear about their views on supply and demand and their projections of their own countries’ production,” al-Falih said in an interview while attending UN climate talks in Katowice, Poland.

His comments were less definitive than those made in Abu Dhabi last month, when he said the group should consider reducing production by 1mn barrels a day. “What we said in Abu Dhabi is that projections are that there will be 1mn bpd of oversupply, and that we will wait until we get to Vienna and are certain what that number is,” he said.