OPEC is expected to stick to its current policy of output cuts in the second half of 2018, but oil producers have plenty of supply with which to respond to any sudden disruptions, Saudi Arabian energy minister Khalid al-Falih told reporters on Monday.
The world will still have a surplus of oil by end-March next year, Saudi Arabia’s energy minister said, signalling a willingness to extend output cuts when Opec meets at the end of November on whether to extend caps well into 2018.
The turn of events in Saudi Arabia could push crude prices higher, but a bigger driver of prices will be OPEC’s impending decision on extending the production cut.
Oil prices hit their highest levels since July 2015 early on Monday as markets tightened, while Saudi Arabia’s crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.
Saudi Arabia’s push for reforms could face a backlash from within and there is no guarantee the drive by Crown Prince Mohammed bin Salman will succeed, one of the biggest oil investors in the Middle East, France’s Total , said on Thursday.
Oil prices inched higher on Friday, with Brent crude approaching $60 a barrel amid tightening market expectations, buoyed by comments from Saudi Arabia’s Crown Prince backing the extension of OPEC-led output cuts.
U.S. oil prices slipped on Wednesday after a surprising increase in U.S. crude inventories, while U.S. gasoline futures rallied 1 percent on a sharp falloff in inventories.
Saudi Arabia’s state-owned oil giant has “mega investment” plans for the world’s fastest growing oil market, according to Saudi Arabian Oil Co.’s chief executive officer.
Saudi Arabia has cut crude oil allocations for November by 560,000 barrels per day (bpd), an oil ministry spokesman said on Monday, in line with the kingdom’s commitment to an OPEC-led supply reduction pact.
In recent days, most of OPEC members have been echoing the term “ oil marketis balancing” now in response to the effectiveness of their landmark 1.8 million barrels per day output cut pact since 2008 along with Russia.