Saudi energy boss: Oil prices too volatile
ABU DHABI, United Arab Emirates — 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.
“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 U.S. 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 $295 billion.
Despite continued concerns over the volatility in price seen in the fourth quarter of 2018, al-Falih said he is hopeful it can be brought under control.
“I think early signs this year are positive,” he said.