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13 Jan, 2019 10:00

Saudi energy minister says oil market on ‘right track’ as OPEC’s largest producer slashes exports

Saudi energy minister says oil market on ‘right track’ as OPEC’s largest producer slashes exports

Saudi Arabia’s top energy official expects the oil market to stabilize shortly, and says it’s already “on the right track” after a rout in the last quarter of 2018. The statement follows Riyadh’s recent commitment to OPEC cuts.

“If we look beyond the noise of weekly data and speculators’ herd-like behavior, I remain convinced that we’re on the right track, and that the oil market will quickly return to balance,” Energy Minister Khalid al-Falih said at an oil conference in Abu Dhabi on Sunday, according to Reuters. 

The world’s top crude supplier says it will continue to work with members of the Organization of the Petroleum Exporting Countries (OPEC) and others to balance the oil market and do more to achieve this goal, if necessary.

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“[Saudi Arabia] will work with all interested producers who want to bring stability to the market... OPEC plus and anybody else who would like to do it with us,” the minister told a CNBC reporter. 

Earlier this week, Falih said the kingdom would cut its oil exports in January by 10 percent compared to November; meeting its goal of reducing output to 10.2 million barrels per day (bpd). Riyadh is expected to reduce crude exports to 7.2 million this month and cut it further by 100,000 bpd in February. 

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The announced cuts, which were made in compliance with a deal agreed at the cartel and allied oil producers meeting in early December, reassured the market and boosted the prices on global benchmarks, West Texas Intermediate (WTI) and Brent, to almost one month highs on Wednesday. They slightly rolled back at the end of the week, with Brent closing Friday session at $60.48 per barrel and WTI trading at $51.59.

Earlier, JP Morgan warned that the oil market may face a “low price scenario, which is $55 Brent” in 2019 if the cartel members fail to stick to the plan.

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