Global oil prices were rising last night after Saudi Arabia and Russia ruled out any immediate boost to crude output, effectively rebuffing President Donald Trump’s calls for action to cool the market.
US crude future topped $US78 a barrel and Brent crude rose back over $US80 a barrel in the wake of the indecisive result of the Algiers meeting. Prices were up more than $US1.80 a barrel around midday in London.
“I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost, according to Reuters.
“We have achieved the objectives pretty much of what we set out in 2016,” al-Falih said at the start of the gathering. “Markets are relatively balanced,” he added.
Falih also insisted that Saudi Arabia had enough spare oil capacity—around 1.5 million barrels a day—to meet any shortages in the global oil market.
He added that Saudi Arabia would increase output in October, in line with market needs. “Demand will be higher in October than September and it will be met 100%.
Falih said Saudi Arabia had spare capacity to raise output but such a move was not required at the moment and might not be needed next year as, according to OPEC’s projections, a stellar rise in non-OPEC production could exceed global demand growth.
“The markets are adequately supplied. I don’t know of any refiner in the world who is looking for oil and is not able to get it,” Falih said, adding that Saudi Arabia could raise output by up to 1.5 million barrels per day (bpd) if needed.
“Given the numbers, we saw today, that (an output increase in 2019) is highly unlikely unless we have surprises on the supply and demand,” Falih added.
Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as U.S. sanctions on Iran were creating new challenges for oil markets.
“Oil demand will be declining in the fourth quarter of this year and the first quarter of next year. So far, we have decided to stick to our June agreements,” Novak said, according to Reuters.
