Saudi Energy Minister: We discussed the continued reduction of production and things may change in June
Saudi Energy Minister Khalid Al-Faleh said the strong commitment to global oil cuts is unsustainable, although there is consensus to stay on course to reduce oil stocks. The main option discussed by OPEC and its allies is to continue production cuts in the second half of 2019, Change in June .
Al-Falih's remarks came on the back of the meeting of the joint ministerial committee of OPEC and its partners to monitor the production agreement in Jeddah, Saudi Arabia.
The minister said it would be preferable to continue production management in the second half of 2019, and that oil prices would not deceive anyone as it is believed that the global market is very weak.
Al-Falih pointed out that demand for oil in Asia has recovered, while demand for Saudi oil in the US has declined, and oil production in June and May is expected to reach 9.8 million barrels per day.
He said that if a decision was made in June to extend oil cuts, Saudi Arabia would remain within those production limits. He said the kingdom would respond to the needs of the oil market and that production in July would be within the OPEC ceiling.
On the other hand, the minister said that the sanctions on Iran comes at a time when the market is well supplied, although no one knows what Iran produces or exports oil, in addition to that much of Iranian oil does not know its fate, which increases the uncertainty in market.
Russian Energy Minister Alexander Novak said the participants had discussed the supply and demand balance and the option of reducing cuts and that OECD oil stocks were 13 million barrels higher than the average of 5 years.
Novak also noted that the global demand for oil below expectations, and it is unfortunate that the state of uncertainty affect the market.
Opec, Russia and other independent producers, the so-called OPEC +, have agreed to cut production by 1.2 million barrels per day (bpd) from 1 January to 6 months, with a view to halting stockpiles and subsidizing prices.
The ministerial committee's meeting comes amid fears of a world-wide supply market.