Saudi Arabia’s newly appointed energy minister said Thursday that OPEC and non-OPEC partners would consider deeper production cuts at its next full meeting. Speaking shortly after the conclusion of the Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi, Prince Abdulaziz bin Salman said the Middle East-dominated group had a clear readiness to be responsive. His comments come at a time when OPEC and non-OPEC partners, sometimes referred to as OPEC+, have struggled to shore up crude futures this year. It has once again raised questions about whether the group, which consists of some of the world’s most powerful oil-producing nations, really wields that much influence over oil markets. The full coalition will next meet in Vienna, Austria in early December to decide whether any further action to stabilize oil markets is required for 2020.
Abdulaziz, who replaced Khalid al-Falih as Saudi Arabia’s energy minister on Sunday, described Thursday’s JMMC meeting as “productive,” “fruitful” and “transparent.” Sitting alongside his Russian counterpart, Abdulaziz said the talks had “awakened” Riyadh and Moscow to a “new reality.” He explained the two countries had not been “inclusive” enough to other OPEC members in previous meetings, promising that this would change over the coming months. “I think our colleagues have welcomed this change,” he added. The defacto leader of OPEC, Saudi Arabia, and non-OPEC member Russia, are the most influential members of OPEC+. Their growing dominance came in for intense criticism earlier in the year, when Iran’s oil minister warned the future of the cartel was at risk if Riyadh and Moscow continued to sideline traditional OPEC members. Saudi Arabia and Russia both reaffirmed their respective commitment to the OPEC-led production cuts once again on Thursday. OPEC+ agreed to reduce output by 1.2 million barrels a day at the beginning of 2019. That deal replaced a previous round of production cuts that began in January 2017.
Russian Energy Minister Alexander Novak stressed it was “extremely important” for all members signed up to the declaration of production cuts to reach full compliance. Novak’s comments were thought to be directed at over-producing countries such as Nigeria and Iraq. On Thursday, benchmark Brent crude was trading at $60.96 a barrel and U.S. West Texas Intermediate (WTI) was trading at $55.99 a barrel. Oil markets have taken comfort from a postponement of the next round of China tariffs by President Donald Trump and data showing a sharp drop in U.S. crude oil stockpiles. Source: CNBC
