All must stay the course, take responsibility: Al-Falih at OPEC meet

The global oil market is headed toward balance, but continued hard work will be required by OPEC and its non-member partners to reach the intended mark, Khalid Al-Falih, president of Organization of Petroleum Exporting Countries, said on Thursday.

“To achieve our goal on a sustainable basis, I call on all of you to stay the course, with each member country taking full responsibility for its own contributions,” Al-Falih, who is also Saudi Arabia’s energy minister, said at the start of OPEC’s 173rd meeting.

The OPEC meeting is expected to discuss an extension to last year’s production-cut deal that expires in March 2018. Major non-OPEC producers, including Russia, will join the meeting later today.

Expectations are that the output deal, which aims to reduce oversupply and balance global oil markets, will be extended by another six to nine months.

Al-Falih said oil markets are a “collective global responsibility.”

“We have come a long way,” he said. “A lot more still needs to be done.”

The minister said the earlier decision to extend the output deal by nine months from June this year “was indeed the right one,” which was highlighted by the fact that the OECD overhang was down almost 50 percent in October from about 280 million barrels above the moving five year average in May.

Crude and floating storage was also down by an estimated 50 million barrels since June, he said.

“For the mid-to long-term the future market environment looks very healthy,” Falih said, adding that there are signs of strong oil demand.

He also called on oil firms to invest in capacity, saying trillions of dollars must be invested in additional capacity and infrastructure over the next couple of decades.

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