Opec vows to act to stabilise oil price amid market jitters
Opec and allied oil producers will cut or adjust production as needed to balance the market, the group's president, United Arab Emirates Energy Minister Suhail Al Mazrouei, said yesterday.
If Opec and its allies need to reduce output, they will do so, he said in a Bloomberg TV interview in Abu Dhabi.
The producers will take whatever steps are necessary to keep the market stable and keep crude inventory levels where they are, Mr Al Mazrouei said. Oil production is above expectations, and Opec needs to change its strategy, he said.
"We have cut in the past to reach the market balance, and if we need to cut production to keep the market balanced, we will," Mr Al Mazrouei said.
"The group will reach consensus on whatever is required to adjust the market."
Oil has barely recovered from a record 12-day decline as investors fled a market battered by swelling supplies and a darkening demand outlook. Futures in New York were 0.8pc higher yesterday morning after plunging 7.1pc in the previous trading session, in the biggest one-day drop in more than three years.
Crude inventories in industrialised nations have increased for four consecutive months and are set to jump by two million barrels a day in the first half of 2019 if current output is maintained, the International Energy Agency said yesterday in its monthly report. Opec, in a report on Tuesday, said it sees demand for its own crude falling faster than expected next year as a slowing global economy crimps demand and rival supplies surge.
Oil market fundamentals "are still reasonable" and don't justify the sell-off on Tuesday, Mr Al Mazrouei said.
Opec is to gather in Vienna to assess the market. "In December when we meet, if there's a requirement to curtail, whatever the required cut, we will cut in accordance to what we agree on," Mr Al Mazrouei said. "Whatever price that we end up with, the market will decide the price, not us."
Saudi Arabia, Opec's biggest producer, has expressed the need for producers to cut one million barrels a day, reversing a June decision to boost supply to contain a price rally. Opec, Russia and other suppliers agreed to limit their production starting in January 2017 to drain a global glut.
Saudi Energy Minister Khalid Al-Falih told reporters on Sunday in Abu Dhabi that the kingdom will pare its exports by 500,000 barrels a day in December.