By Rania El Gamal and Vladimir Soldatkin
JEDDAH, Saudi Arabia (Reuters) – Saudi Arabia Energy Minister, Khalid al-Falih said on Saturday that he saw no shortage of oil supply as global oil lists were still rising, especially from the US, but OPEC is responsive to the needs of the oil market.
Speaking at Jeddah before a ministerial panel gathered on Sunday the top OPEC and non-OPEC producers, including Saudi Arabia and Russia, Falih told Reuters that OPEC will not determine output until the end of June when the next group meets.
"I'm not sure there is a shortage of supply, but we'll look at the analysis (market) I would definitely be responsive and the market will be provided," Falih said, when asked whether there was an increase in output on the due table to concerns about oil shortages.
"But all the signs are that stocks are still rising. We saw the data from the US week after week, and they're a huge increase, so there's obviously plenty of supply."
The Institute of Exporting Countries Petroleum (OPEC), Russia and other non-OPEC producers, called OPEC +, agreed to reduce output by 1.2 million barrels a day (bpd) from January 1 for six months, a planned deal to prevent construction inventory and weakening prices.
"We will be flexible. We're going to do the right thing as we always do," Falih said for any decision at the June meeting on continuing the discounts.
Falih said that OPEC is guided by two main principles: "One to keep the market in its direction towards balancing, and lists (back) back to normal level. Two will be responsive to market needs. . "
Saudi Arabia does not see the need to give a rapid boost to production now with oil prices around $ 70 per barrel, as it fears an accident in prices and stock accumulation, says OPEC sources. But Russia wants to increase supply after June when the OPEC + agreement ends, the sources said.
The United States on the other hand is not a member of OPEC + but our close ally from Saudi Arabia, wants the group to boost the output to t bring down oil prices.
Falih has to find a delicate balance between keeping the oil market's well-supplied and high enough prices for Riyadh's budget needs, wishing Moscow t to ensure that Russia remains in the OPEC + agreement, and that it is responsive to US concerns and the rest of the OPEC + said, the sources.
OPEC's harmonious share of cuts is 800,000 bpd, but its actual decline is much greater due to production losses in Iran and Venezuela. Both are under U. sanctions and have been excluded from the voluntary discounts under the agreement led by OPEC.
The President U. Donald Trump has called on OPEC and de facto leader of the Saudi Arabia group to reduce oil prices.
The Sunday ministerial panel meeting, known as JMMC, comes in the midst of tight market concerns as Iran's oil exports are likely to fall further in May, and loads of Venezuela could fall further in the next few weeks due to Washington sanctions.
Oil contamination also forced Russia to stop flows along the Druzhba pipeline – a key channel for crude to Eastern Europe and Germany – in April. He left the suspension, so far still unclear, refiners are scrambling to find supplies.
But inventories rose unexpectedly last week to the highest since September 2017, while gasoline stock piles fell more than expected, the Ministry of Energy Information (EIA) said on Wednesday. [EIA/S]
Tensions between Saudi Arabia and fellow member of OPEC Iran also run high, after last week's attacks on two Saudi oil tankers off the United Arab Emirates and another on Saudi oil facilities inside & # 39 Kingdom.
Saudi Arabia accused Iran of ordering the attack on Saudi Aramco's major oil pumping oil stations in which Iran's Houthi militia, Yemen, has claimed responsibility for it.
OPEC's technical committee and non-OPEC found that oil producers' compliance with the supply reduction agreement reached 168 per cent in April, three sources told Reuters on Saturday.
That shows that OPEC + producers cut output by more than their share. Saudi Arabia has been pumping below its production target since January to keep track of oil lists and prices.