Saudi Arabia pulls out from planned meeting with Russia
Saudi Arabia has pulled out of a scheduled meeting with Russia and other oil producers outside the Organization of Petroleum Exporting Countries (OPEC). OPEC and non-OPEC members were scheduled to meet today to discuss production cuts ahead of the cartel’s November 30 meeting when decisions would be finalized.
Under a preliminary agreement reached in September in Algeria,would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008.
In the meeting between OPEC and non-OPEC producers, Russia, which along with Saudi Arabia is one of the world’s two largest producers, was expected to offer to freeze production at current levels instead of reducing it.
Falih said that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.
“We expect the level of demand to be encouraging in 2017, and the market will reach balance in 2017 even if there is no intervention by OPEC. But OPEC intervention aims to expedite this balance and the market recovery at a faster pace,” he said.
Saudi Arabia pulled out of the talks due to disagreements over sharing supply cuts, and the Monday talks collapsed before they even started.Saudi Arabia’s energy minister Khalid al-Falih said Saudi Arabia was sticking to its position on the Algiers agreement that everyone should cooperate.
According to an OPEC official, Saudi Arabia wanted to clear up internal differences in the group first before they sat down at the table with non-OPEC members.
Asked whether Saudi Arabia was keeping its output high in November at around 10.6 million barrels per day, however, Falih said: “The level of demand for Saudi crude is still high and very healthy.”
“Regardless of Saudi and its market share, I think if we look at it as an indication of the health and recovery of the oil markets, it is a positive sign that makes us optimistic about the market recovery.”
“I don’t think that we have one path only in OPEC meetings, which is cutting production – I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States,” he added.