Ejiofor Alike with agency reports
Saudi Arabia on Tuesday dashed the hopes that the Organisation of Petroleum Exporting Countries (OPEC) could reach an agreement to reduce crude oil production in Algeria today as the differences between the kingdom and rival Iran remained unresolved.
Saudi Arabia had offered to reduce its output if Iran agreed to freeze production, a shift in Riyadh’s position as the kingdom had previously refused to discuss output cuts.
But Iranian Oil Minister ,Bijan Zanganeh, had yesterday stated that expectations should be modest.
However, yesterday’s position of Saudi Arabia’s Energy Minister showed that his kingdom and Iran remained too far apart.
“This is a consultative meeting … We will consult with everyone else, we will hear the views, we will hear the secretariat of OPEC and also hear from consumers,” Reuters quoted Saudi Energy Minister, Khalid al-Falih, as telling journalists yesterday.
OPEC will hold informal talks today and its members are also meeting non-OPEC producers such as Russia on the sidelines of the International Energy Forum, which groups producers and consumers.
Oil prices have more than halved from 2014 levels due to oversupply, prompting OPEC producers and rival Russia to seek a market rebalancing that would boost revenues from oil exports and help their crippled budgets.
The predominant idea since early 2016 among producers has been to agree to freeze output levels, although market watchers have said such a move would fail to reduce unwanted barrels.
Russian Energy Minister, Alexander Novak, was due to meet Zanganeh yesterday in what sources said was a new attempt to persuade Tehran to play ball.
Falih also said he was optimistic about the oil market although rebalancing was taking longer than expected.
“The market is trending in the right direction, slower than what we had hoped for a few months ago but the fundamentals are moving in the right direction.”
“From that aspect we are feeling good about the market and I think the rebalancing is here but taking (longer) than what we had hoped,” Falih told journalists.
He said record global stocks of oil had started to decline, adding: “How fast will it take place, it also depends on the production agreement. If there is a consensus on one in the next few months, Saudi Arabia will be with the consensus view.”