VIDEO: Al-Falih ‘optimistic’ on OPEC output deal

Saudi energy minister Khalid Al-Falih on Wednesday said that “optimistic” sentiment prevailed at OPEC talks to cut output for the first time in eight years.  

“We are getting close,” the minister told reporters on the sidelines of the meeting, adding that the final terms are yet to be agreed upon.

The minister said any agreement will have to be monitored through a fair mechanism, and must involve OPEC and non-OPEC exporters.

An OPEC production cap of 32.5 million barrels per day (bpd) is the one that appeared the most attractive, he said, adding that Saudi Arabia was open to this limit.

“It will mean that we take a big cut and a big hit from our current production and from our forecast for 2017.”

Even if the cartel fails to reach an agreement this time around, the market will still recover—albeit, at a slower pace, Al-Falih said.

“I have said it repeatedly that the fundamentals are moving in the right direction.”

If OPEC can agree during today’s meeting, the next move should be to involve non-OPEC producers that have displayed a “general willingness to offer some reduction,” he added.

The minister mentioned that Russia, which currently has its production levels at an all-time high, will need to consider a cut and not a freeze.

“I am hoping for 600,000 (bpd), combined,” Al-Falih said in response to a question on how much non-OPEC producers should cut all together. 

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com