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All options are on the table for the next summit of the OPEC+ coalition in March, including further cuts in oil production, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said on Thursday, Al Arabiya television reports.
At the OPEC+ meeting in December, OPEC and its Russia-led partners decided to deepen the current cuts by 500,000 bpd in the first quarter of 2020, when demand is expected at its weakest for 2020. This brings total production reductions at 1.7 million bpd—that is if rogue members fall in line with their quotas.
Considering the pledge from OPEC’s largest producer and de facto leader Saudi Arabia that it would continue to significantly overcomply with its share of the cuts, the total OPEC+ cuts could be as high as 2.1 million bpd, OPEC said.
Saudi Arabia will work for stable oil prices amid heightened tensions in the Middle East, Prince Abdulaziz bin Salman said at an energy conference in Saudi Arabia last week.
“We would like to have a stable oil market, sustainable growth in terms of demand, sustainable growth in terms of supply,” the Saudi energy minister said, as carried by Asharq al-Awsat.
“The worst thing is to have low oil prices that permanently damage industry,” according to Prince Abdulaziz bin Salman.
Saudi Arabia needs oil prices at above US$80 to balance its budget this year, according to estimates from the International Monetary Fund (IMF).
When OPEC and non-OPEC ministers meet in Vienna in March to discuss how to proceed with their production-cutting price-fixing policy, they will have to consider not only fundamentals but also the fact that heightened tension in the Middle East and a major outage in Libya have not moved oil prices up, despite the fact that virtually all of Libya’s production—1.2 million bpd—is currently offline.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.