Al-Faleh: OPEC will not change its production policy during the April meeting
Saudi Arabia and the United States will lead strong global demand for oil this year but it would be premature to change OPEC production policy and its allies at the next meeting of the Organization in April, Saudi Energy Minister Khalid al-Falih said.
Global oil demand is expected to increase by about 15 million bpd, he said.
"If you look at Venezuela alone, you will be horrified and if you look at the United States, you will say that the world is full of oil, you have to look at the market as a whole," Faleh said.
Venezuela is experiencing a political and economic crisis and its oil exports have fallen 40 percent to about 920,000 bpd since Washington imposed sanctions on its oil industry on Jan. 28.
On the other hand, production in the United States reached a record level of more than 12 million barrels per day in February.
In a report last month, the IEA left its demand growth forecast for 2019 unchanged from January at 1.4 million bpd.
Al-Falih said China's demand to break records month after month and estimated that China will exceed 11 million barrels per day in 2019.
For Saudi Arabia, oil production is expected to remain at 9.8 million bpd this month.
"Aramco will finalize its allocations for April today or tomorrow so we will know more on Monday, but my expectation is that Nissan will be pretty much like March," he said. The Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russia meet in Vienna on April 17 and 18 and another meeting is scheduled for June 25-26.
Al-Falih said it was unlikely the group would change its production policy in April and if needed, amendments would be made in June.
"We'll see what happens by April if there's an unexpected crash somewhere else, but otherwise I think we'll just keep going.
"We will see the market situation by June and make a corresponding adjustment." On January 1, OPEC, along with Russia and other non-OPEC members, began a new cut in production to avoid a speck in crude supplies that could cause prices to fall.
The group agreed to cut production by 1.2 million bpd for six months.
Recent sources have said the likely scenario for OPEC production policy and its allies is for the current agreement to be extended in June, but much depends on the size of US sanctions on both OPEC member Iran and Venezuela.
Opec's quota for production cuts stands at 800,000 barrels per day (bpd) applied by 11 OPEC members after excluding Iran, Libya and Venezuela from the cut.