EMEA News
Saudi Arabia Indicates it May Be Willing to Slash Output
The Saudi Arabia minister for petroleum and mineral resources says his kingdom will cooperate with all oil producing countries to help stabilize the oil market, CNBC reports.
Speaking at the Seminar on Future of Energy in the Middle East and North Africa in Bahrain, Ali bin Ibrahim Al-Naimi noted that "Perhaps it would be fitting here to mention the role of the Kingdom of Saudi Arabia in the stability of the oil market, and its continued willingness and prompt, assiduous efforts to cooperate with all oil producing and exporting countries, both from within and outside OPEC, in order to maintain market and price stability."
The minister's comments were supported during a subsequent Saudi cabinet meeting, with the Saudi press agency stating: "The Cabinet stressed the Kingdom's role in the stability of the oil market, its constant readiness and continuing pursuit to cooperate with all oil producing and exporting countries."
These statements prompted widespread speculation that the Organization of Petroleum Exporting Countries (OPEC) may be persuaded to slash its oil output, whose ceiling is currently at 30 million barrels per day but has indicated may rise next month.
A reduction in oil output would likely have consequences for bunker buyers, with oversupply, and the resulting global oil glut, having pushed bunker prices this year down to their lowest in over 10 years.
When the statements were published on November 23, oil traded at near $42 per barrel in New York and futures recovered from a 3.6 percent drop.
Some analysts were however unmoved by the developments.
"It's hard to see what else moved the price besides the Saudi statement, even though it's exactly what oil minister al-Naimi said last week," said Giovanni Staunovo, an analyst at UBS in Zurich.
"For me there's nothing new, but the OPEC meeting is approaching and participants might prefer to close their short positions."
Earlier this month the strain of relationships between OPEC members became obvious when Algeria and Iran called for a return of the group's quota system, which was dropped in 2011.
