The natural gas market is struggling with a lack of stocks, investments and coordination among buyers and sellers and needs to be properly regulated, the Saudi energy minister has said.
Speaking at The Russian Energy Week forum on Thursday, Abdulaziz bin Salman Al Saud also claimed the OPEC+ agreement has started to create a balance and is ensuring energy security when it comes to oil, but it takes a diversity of sources of energy to enable the organization to do that.
He said: “People need to conduct themselves in assuring that world economy is well supplied with the diversity of sources of energy."
“Gas markets, coal markets, and other energy sources need to be regulated, people need to copy and paste what OPEC has done and what OPEC+ has achieved,” the Saudi minister added.
Saudi Arabia has proposed that Russia consider the possibility of cooperating in the natural gas market, Russian Deputy Prime Minister Alexander Novak said on Thursday, according to TASS news agency.
The benefits to energy consumers can be seen in the relatively steady increase in the price of oil this year compared with the wild price swings in other markets, said the Saudi energy minister.
“What we see in the oil market today is an incremental (price) increase of 29 percent, vis-à-vis 500 percent increases in (natural) gas prices, 300 percent increases in coal prices, 200 percent increases in NGLs (natural gas liquids) ...,” he said.
OPEC+ has done a “remarkable” job acting as “so-called regulator of the oil market,” he said, as he dismissed calls for faster output increases.
He said OPEC+ would be adding 400,000 barrels per day (bpd) in November, and then again in the following months.
At its meeting earlier this month, OPEC+ stuck to its agreement of increasing production by 400,000 bpd a month as it unwinds production cuts.
“We want to make sure that we reduce those excess capacities that we have developed as a result of COVID,” he said, adding that OPEC+ wanted to do it “in a gradual, phased-in approach.”
Prince Abdulaziz said that while OECD oil inventories were on track to normalize at the end of this year, 2022 was looking “a bit of a challenging year.”
OPEC+ figures show the oil market is set for a surplus of about 1.4 million bpd next year.