Al-Falih calls for 1 mbd global oil output cut

A global oil output cut of one million barrels per day (mbd) is needed in order to maintain balance, Saudi Energy Minister Khalid Al-Falih said on Monday at ADIPEC 2018 in Abu Dhabi.

Saudi Arabia will take appropriate measures to keep oil inventories in a narrow band in the coming months to come into balance, he added.

“We are going to do everything to keep our inventories in a narrow band as we need to come into balance,” he said in a panel at the annual Abu Dhabi International Petroleum Exhibition & Conference, which brings together global energy leaders. “The consensus among members is we need to do everything to keep a balance.”  

On Sunday, Al-Falih said that Saudi Arabia would reduce its December allocations to customers by about 500,000 barrels per day (bpd) compared to November. The Kingdom has been pumping 10.7 million bpd since October, the minister said.

“The initial headlines coming out of the OPEC meeting in Abu Dhabi that Saudi Arabia has committed itself to lower production output should be enough to prevent the value of oil from falling any further, at least for now. This meeting is still ongoing and not scheduled to conclude until later on Monday, but it does appear at least on headline that the consensus is that the price of oil would benefit from less supply heading into 2019,” said Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM.

Meanwhile, Al-Falih also denied reports that the Organization of Petroleum Exporting Countries (OPEC) could be dissolved.

“Within policy circles, we have no plan to eliminate OPEC. It is essential to maintain stability in the oil and energy markets,” he said.

Write to Paromita Dey at paromita.d@argaamplus.com and

Reem Abdellatif at reem.a@argaam.com