Saudi oil minister says OPEC production cut 'imperative'

Saudi oil minister says OPEC production cut 'imperative'
2 min read
13 November, 2016
Saudi Arabia's oil minister said it was "imperative" that OPEC nations finalise an agreement over a cut in oil production aimed at boosting crude prices.
Saudi's oil minister met with his Algerian counterpart on Saturday [AFP]
An agreement between OPEC nations over a cut in oil production is "imperative", Saudi Arabia's oil minister said, according to media reports on Sunday.

Khaled al-Faleh called on cartel members to stick to the surprise cut deal, reached in Algiers in September, during a meeting with his Algerian counterpart Noureddine Boutarfa on Saturday.

"In this period marked by unstable oil prices it is imperative to reach a consensus between OPEC nations and to agree on an effective mechanism and precise figures to activate the historic Algiers accord," Falih was quoted as saying by Algeria's APS news agency.

Falih said he was "optimistic" that the agreement would come into effect.

The Saudi minister was quoted as saying that a "fair and balanced" output deal would allow unrest-hit Libya and Nigeria, with a return of security, to raise production, while reaching agreement with Iran on a freeze. 

Falih and his Algerian counterpart Boutarfa called for the date an OPEC preparatory meeting of experts ahead of the Vienna conference to be brought forward to November 21 from its scheduled date of November 25, APS reported.

OPEC officials said in September that the group would aim for a combined output of 32.5-33 million bpd.

On Friday, however, prices fell on news from OPEC that it had pumped oil in October at record levels of 33.64 million bpd, 236,000 barrels per day more than the previous month.

The September meeting of OPEC members produced an agreement to cut the cartel's output by 750,000 barrels per day (bpd), aiming to boost crude oil prices, according to Bloomberg News.

Oil rose on news of the deal, but crude prices are still more than 50 percent lower than their mid-2014 levels. 

This week, Saudi Arabia's state oil producer Aramco said a global supply glut will end in 2017, leading to higher prices at the pumps.

Production has outpaced demand over the past two years, with the resulting supply glut hammering prices from highs of more than $100 a barrel in June 2014 to near 13-year lows below $30 in February this year. Prices are currently hovering near $50 a barrel.