Khalid al-Falih, Saudi Arabia’s energy minister, warned oil traders Friday that a dramatic upswing in crude futures was little reason to become complacent.
Speaking to reporters in Jeddah, the OPEC kingpin said, “We have to be patient. We shouldn’t jump the gun, we shouldn’t be complacent and listen to some of the noise such as ‘mission accomplished’. I think we still have work ahead of us.”
OPEC, Russia and several other allied producers have spearheaded an ongoing effort to try to clear a global supply overhang and prop up prices.
The agreement, which came into effect in January 2017, has already been extended through until the end of this year — with producers scheduled to meet in June to review policy.
Last Friday, the International Energy Agency said, in its forecast that the global oil supply has eased due to the recent production cut measures.
According to the agency, the Organization of the Petroleum Exporting Countries and Russia mission to bring oil stocks down to a five-year average by ending the supply glut has worked.
The initial target of the supply-cutting deal was to reduce industrialized nations’ oil inventories back to their five-year average. Nonetheless, with several major global producers honing in on achieving their original aim, there is little indication from the world’s top exporter that it wishes to wind down the supply cuts.
OPEC and its partners meet in Jeddah, Saudi Arabia on Friday, with the 14-member oil cartel then set to reconvene on June 22 to review to its oil production policy.
Commodities February 10, 2021