‘Premature’ to confirm OPEC+ cuts: Saudi minister

A reduction in output depends on all of OPEC and its partners making a cut, Saudi Energy Minister Khalid Al-Falih says. (Shutterstock)
Updated 05 December 2018
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‘Premature’ to confirm OPEC+ cuts: Saudi minister

  • The oil producers are scheduled to meet in Vienna on Dec. 6 to discuss production policy for the next year
  • Donald Trump has been pushing Saudi Arabia to pump more oil to keep fuel prices low for Americans

LONDON: Saudi Energy Minister Khalid Al-Falih has dismissed suggestions that OPEC and its partner producers such as Russia will cut output at the next meeting as “premature.”
The oil producers are scheduled to meet in Vienna on Dec. 6 to discuss production policy for the next year.
Speaking in an interview with Bloomberg TV on Tuesday, the minister said that talks between producers were needed to “hear about their views about supply, demand and projections of their own country’s production,” before deciding on the best course of action for the market.
“We just need to figure out what needs to be done and by how much,” he said while attending UN climate talks in Poland.
His comments follow earlier remarks made in Abu Dhabi last month when he said that Opec+ should think about cutting production by 1 million barrels a day.
On Tuesday, he clarified these comments, telling Bloomberg that while projections said that there would be an oversupply of 1 million barrels, the market would have to wait until the Vienna meeting to be certain about that figure.
Any reduction in output relied on all of OPEC and its partners contributing to a cut, Al-Falih said. Russia was “in principle” in favor of a reduction in output, he said.
There has been some global resistance to cuts in OPEC oil production, with US President Donald Trump pushing Saudi Arabia to pump more oil to keep fuel prices low for Americans.
Al-Falih told Bloomberg that the riots in France over hikes in the cost of diesel was a result of “governments unreasonably taxing energy,” rather than the underlying price of crude oil.
“We want a thriving global economy and that requires affordable energy,” he said.
“Saudi Arabia released a lot of oil in the last six months … and the reason we did that is to make sure that energy supplies are plentiful and affordable. Yet consumer countries go and impose tax after tax after tax and take up the slack we are releasing and that is not fair,” he said.
Saudi Arabia currently produces between 11 million and 11.2 million barrels of oil a day, the Saudi minister said.
The price of oil has tumbled from four-year highs of more than $86 a barrel in early October to trade at about $63 per barrel on Tuesday.
On Monday, Qatar — which is currently being boycotted by Saudi Arabia and other Arab states for alleged links to terrorism — said it would leave OPEC next year to focus on gas production instead. The Qataris have said they will attend the December OPEC meeting.


Xi urges financial risk prevention while seeking stable growth

Updated 53 min 24 sec ago
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Xi urges financial risk prevention while seeking stable growth

  • China’s economy is growing at its slowest pace in almost 30 years
  • Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task
BEIJING: China should seek stable development of its economy while not forgetting to fend off risks to its financial system, Chinese President Xi Jinping said, state news agency Xinhua reported on Saturday.
China’s economy is growing at its slowest pace in almost 30 years, spurring policymakers to bolster growth by easing credit conditions and cutting taxes.
“It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the economy operates in a reasonable range,” Xi said.
Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the agency cited Xi as telling a study session for senior Communist Party officials on Friday.
On Wednesday, Premier Li Keqiang reiterated that China would not resort to “flood-like” stimulus such as it unleashed in past downturns.
But after a spate of weak data, investors are asking if Beijing needs to speed or boost support to reduce the risk of a sharper slowdown.
Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy, which would ease financing costs but risk adding to a mountain of debt.
To free up more funds for lending to small and private businesses, the central bank has cut the reserves that banks need to set aside five times in the past year.
Last month, Chinese banks made the most new loans on record, a total of 3.23 trillion yuan ($481 billion). A central bank official said previously that no credit floodgate had been opened, and the lending jump showed recent easing steps were working.
China’s financial sector must serve the real economy, Xi said, but stable growth and risk prevention must be balanced.