UAE energy minister says oil producers are 'committed' to balancing market

UAE energy minister says oil producers are 'committed' to balancing market

UAE energy minister says oil producers are 'committed' to balancing market

As energy minister, al-Falih faced challenging market conditions, including a boon in USA shale production and global trade tensions that created an environment of lower oil prices.

Saudi Arabia, which is the de facto leader of OPEC and pumps about a third of the cartel's oil, took on more than its fair share last time around.

Vision 2030, which the crown prince unveiled in April 2016, aims to develop public-service sectors such as health, education, infrastructure, recreation and tourism, and to steer the Saudi economy away from its dependence on oil and gas, which now accounts for about half of its gross domestic product. Riyadh will continue to back the OPEC+ coalition that combines Russian Federation and other producers with members the Organization of Petroleum Exporting Countries.

Prince Abdulaziz, who is the first prince from the ruling Al Saud family to lead the country's energy ministry, said he did not want to be "too presumptuous" by discussing what he thinks the group of major oil producers should do heading into Thursday's OPEC meeting. London, Hong Kong, and Tokyo have all been rumored at some point as possible worldwide venues for Aramco's listing, and major changes to key positions of power within the Oil Kingdom point to a decision being made in the very near future. During that period he led a team responsible for Saudi Arabia's oil strategy as well as long term Opec strategy. "The new Saudi energy minister has not said anything that deviates from the previous policy". Al-Falih talked to the market a lot, frequently appearing on business TV channels and holding regular press briefings after OPEC meetings, a strategy that ran the risk of diminishing returns.

To prepare for an initial public offering, Aramco replaced al-Falih as board chairman last week with finance-minded Yasir al-Rumayyan, distancing the company from the energy ministry. He was also in charge of the kingdom's industrial development. Al-Rumayyan heads the country's sovereign wealth fund and is a close adviser of the crown prince.

Still, that's considerably below the $80-$85 a barrel that analysts say is needed to balance Saudi Arabia's budget.

Crude prices are now moving around levels of $60 a barrel, compared with more than $75 a year ago, but were given a boost Monday by the Saudi official's comments. The Saudi energy minister said oil production cuts would benefit all exporting nations, in an indication he will support further reductions to address an oversupplied market and sagging prices.

"Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal", Goldman analysts wrote in a note. A challenging oil market may test ties between between the two princes.

Latest News