JEDDAH, Saudi Arabia (Reuters) – Saudi Arabia’s Energy Minister Khalid al-Falih said on Saturday that OPEC will be responsive to the oil market’s needs, but that he was not sure there is an oil shortage with data, particularly from the United States, still showing inventories building.
Saudi Minister of Energy Khalid al-Falih speaks during financial sector conference in Riyadh, Saudi Arabia April 24, 2019. REUTERS/Stringer.
Speaking in Jeddah ahead of a ministerial panel gathering on Sunday by top OPEC and non-OPEC producers, including Saudi Arabia and Russia, Falih told Reuters OPEC will not decide on output until late June when the group is due to meet.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC producers have agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
“We will be flexible. We are going to do the right thing as we always do,” Falih said of any decision at the meeting in June on continuing the reductions.
Falih said OPEC is guided by two main principles: “One to keep the market in its direction towards balancing and inventories back to normal level. And two to be responsive to market needs. We will strike the right balance I am sure.”
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under U.S. sanctions and exempt from the voluntary reductions under the OPEC-led deal.