ABU DHABI: Saudi Energy Minister Khalid Al-Falih said on Monday OPEC and its allies agree that technical analysis shows a need to cut oil supply next year by around 1 million barrels per day (bpd) from October levels to balance the market.
Speaking at an industry event in Abu Dhabi, he said demand from Saudi Arabia’s customers in December would fall by more than half a million bpd compared with November and there was a consensus not to allow oil inventory to build up.
Oil prices rose more than 1 percent on Monday, set for their largest one-day increase in a month after the Saudi comments.
“If all things remain equal, and they almost certainly will not as things will change — it is a dynamic market — then the technical analysis we saw yesterday .... tells us that there will need to be a reduction of supply from October levels approaching a million barrels,” Falih said.
“The consensus is that we need to do whatever it takes to balance the market. If that means trimming supplies by a million (bpd), we will.”
The UAE energy minister Suhail Al-Mazrouei, currently the president of OPEC, similarly said “changes” would likely be necessary as OPEC meets in December in Vienna. However, he added: “We need not to overreact when these things happen.”
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