ZCZC
BCN-25
SAUDI-ENERGY-OPEC-OIL
Saudi ready to boost oil output, spare capacity: minister
RIYADH, Oct 24, 2018 (BSS/AFP) – Saudi Energy Minister Khalid al-Falih
said on Tuesday the OPEC kingpin was ready to boost its crude production and
spare capacity to help maintain a balance in the global oil market.
Speaking at an investment conference in Riyadh, Falih also said OPEC and
non-OPEC producers are expected to sign in December an “open-ended” agreement
to continue cooperation in the energy markets.
“I dont rule out that the kingdom’s production which has been 9-10
(million barrels per day) over the last decade or so will be a million to two
millions (barrels) higher,” Falih said, without providing a time frame.
Saudi Arabia has already boosted its daily output to well over 10.5
million bpd to meet rising demand in the wake of several production
disruptions in other countries.
The kingdom currently holds the biggest spare capacity of around two
million barrels which can be utilised when required.
“Investing in the capacity and producing the capacity will continue to be
done,” Falih said despite complaining of the high cost of raising and
sustaining such capacity.
The Saudi minister expected demand for oil, which currently stands at
around 100 million bpd, to rise to 120 million bpd over the next three
decades.
Falih said that around 25 producing countries from OPEC and non-OPEC are
expected to sign in December a long-term cooperation agreement following the
success of their coordination that helped boost prices.
“What we are hoping to do is to ink an agreement amongst at least the 25
(producers) that are signatories to the current agreement. Hopefully more
countries will join,” he said.
“It will become an open-ended agreement to continue to monitor and work
together to stabilise the markets. This is the objective of the agreement:
monitor and stabilise,” he said.
Falih said he believes the oil market is “in a good place today in terms
of supply and demand balances and inventories” after lifting restrictions on
output in June.
OPEC and non-OPEC producers, including the world’s top producer Russia,
agreed in November 2016 to cut production to deal with huge inventories that
sent prices crashing.
Since that agreement, oil prices have more than doubled and were currently
hovering at just under $80 a barrel.
Falih said the oil producers will continue to monitor supply and demand in
the market especially with the Iran sanctions looming and would be ready to
act if needed.
BSS/AFP/HR/1100