Al-Naimi: OPEC deal has potential to balance oil market

Saudi Arabia still has production potential, says former Petroleum and Mineral Resources Minister Ali Al-Naimi.
Updated 05 December 2016
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Al-Naimi: OPEC deal has potential to balance oil market

WASHINGTON: OPEC’s agreement to cut production for the first time in eight years has the potential to balance the oil market, as long as everyone sticks to it, former Petroleum and Mineral Resources Minister Ali Al-Naimi was quoted as saying in a Bloomberg report.
“The only tool they have is to constrain production,” Al-Naimi said of OPEC at an event in Washington.
OPEC recently agreed to cut production by 1.2 million barrels a day, while Russia and other oil producers committed to reducing their own output by another 600,000.
According to Bloomberg, Al-Naimi also that said he was not opposed to production cuts in 2014, as long as everyone participated. They would not, he said.
“There’s not much you can do if there is no maximum cooperation between the producers,” said the former minister.
He also expressed skepticism that Russia, considered a wildcard during talks, would follow through on its promise to reduce output. “Will Russia cut 300,000?” he said. “I do not know. In the past, they did not.”
Saudi Arabia still has production potential, Al-Naimi said in the report.

Technology
During a panel discussion with Hess Corp. CEO John Hess and former Schlumberger CEO Andrew Gould, Al-Naimi said that Saudi Arabia has untapped shale oil and gas reserves, and advancing technologies would only bring shale production costs lower.
Two sources earlier told Reuters that OPEC will meet non-OPEC countries to finalize a global oil limiting pact on Dec. 10 in Vienna.
OPEC hopes non-OPEC countries will contribute another 600,000 bpd to the cut. Russia has said it will reduce output by around 300,000 bpd.


Oil rises on US-Iran tensions, but trade war concerns weigh

Updated 53 min 36 sec ago
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Oil rises on US-Iran tensions, but trade war concerns weigh

  • There are expectations producer club OPEC will continue to withhold supply this year
  • President Donald Trump on Monday threatened Iran with ‘great force’ if it attacked US interests in the Middle East

SINGAPORE: Oil prices rose on Tuesday on escalating US-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year.
But gains were checked by concerns that a prolonged trade war between Washington and Beijing could lead to a global economic slowdown.
Brent crude futures, the international benchmark for oil prices, were at $72.24 per barrel at 0534 GMT, up 27 cents, or 0.4 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were up 26 cents, or 0.4 percent, at $63.36 per barrel.
“Escalating tensions between the US and Iran, in addition to signs that OPEC will continue its production cut, drove oil higher,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
US President Donald Trump on Monday threatened Iran with “great force” if it attacked US interests in the Middle East. This came after a rocket attack in Iraq’s capital Baghdad, which Washington suspects to have been organized by militia with ties to Iran.
Iran said on Tuesday that it would resist US pressure, declining further talks under current circumstances.
The tension comes amid an already tight market as the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been withholding supply since the start of the year to prop up prices.
A meeting has been scheduled for June 25-26 to discuss the policy, but the group is now considering moving the event to July 3-4, according to OPEC sources on Monday, with its de-facto leader Saudi Arabia signaling a willingness to continue withholding output.
Price gains were constrained by pressure on financial markets, which have this week been weighed down by worries that the United States and China are digging in for a long, costly trade war that could result in a broad global slowdown.
Singapore, seen as a bellwether for the health of the global economy, on Tuesday posted its lowest quarterly growth in nearly a decade of 1.2 percent year-on-year. Growth in Thailand, a key Asian emerging market, also slowed to a multi-year low.