More work needed to lower oil inventories: Al-Falih

Global oil inventories have declined from their peak but not yet fallen far enough, Saudi energy minister Khalid Al-Falih said on Friday during a ministerial panel meeting of OPEC and non-OPEC producers in Jeddah.

“We have to be patient, we don’t want to jump the gun, we don’t want to be complacent and listen to some of the noise that ‘mission accomplished’ and things of that sort,” Al-Falih said, cited by news outlets.

Last week, the International Energy Agency (IEA) said in a report that world oil stocks fell significantly last year, and are about to fall below the five-year level in the coming months.

“It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” the agency said.

OPEC and non-OPEC producers will continue to look at oil inventories but also need to start focusing on oil investment, Al-Falih said.

Meanwhile, he noted that it is still premature to discuss easing cuts at the group’s June meeting.

In contrast, Russian energy minister Alexander Novak said that they could begin easing up on output curbs before the end of the year.

OPEC members and non-OPEC players led by Russia have reduced output by 1.8 million barrels per day since January 2017, under a deal set to run until the end of this year.

According to an OPEC statement, commercial stock levels declined from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, corresponding to a drop of 300 million barrels.