Al-Falih: Vision 2030 will lead to stronger and more robust Saudi Arabia

Energy Minister Khalid Al-Falih speaks at the 23rd World Energy Congress in Istanbul, Turkey. (Reuters)
Updated 11 October 2016

Al-Falih: Vision 2030 will lead to stronger and more robust Saudi Arabia

ISTANBUL: Saudi Energy Minister Khalid Al-Falih said it is “not unthinkable” that the price of crude oil could surge to $60 a barrel by the end of the year but warned against drastic production cuts that might shock markets.
Speaking in the opening keynote speech at the World Energy Congress in Istanbul, Al-Falih said that whatever the oil price the Kingdom was in good shape to implement its reform vision to transform the structure of its crude-based economy by 2030.
For months pressured by concerns of slack demand amid a global economic slowdown at a time of a glut in supply, US oil rose above $50 a barrel in New York last week for the first time since June.
This came after Saudi last month agreed to a surprise output cut of oil cartel OPEC, the first in eight years.
“We are seeing the convergence of supply and demand,” said Al-Falih.
“It is not unthinkable we could see $60 (a barrel) by the year end.
“But my eyes are not on the price but on supply and demand.”
He added: “OPEC should make sure not to crimp too tightly and create a shock to the market.
“We do not want to shock the markets into a process that could be harmful.”
The minister admitted that the Kingdom had become “a little fat around the belly, a bit complacent” during the era of high oil prices but was now fully committed to its economic reform program set out by Deputy Crown Prince Mohammad bin Salman.
“The Kingdom will be prepared to deal with whatever price emerges,” he said.
The minister said he believed that demand for oil would peak but “if it does happen we will be ready for it.”
“The (2030) vision will lead to a stronger and more robust Saudi Arabia,” he said, noting this includes the planned IPO of a portion of state oil giant Saudi Aramco, the biggest such offering in history.
World Energy Congress in Istanbul brings together players across the energy sector to discuss a transformation of the sector.
The congress is later Monday to be addressed by Turkish President Recep Tayyip Erdogan and also his Russian and Venezuelan counterparts Vladimir Putin and Nicolas Maduro.


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.