x Abu Dhabi, UAEThursday 27 July 2017

Saudi says OPEC output cuts unlikely

The group will "stay the course" and maintain current production levels, Ali al Naimi told reporters in the Austrian capital.

OPEC is unlikely to agree to a new round of oil output cuts when it meets Thursday in Vienna, the oil minister of Saudi Arabia, the group's most influential member, said Wednesday. The group will "stay the course" and maintain current production levels, Ali al Naimi told reporters in the Austrian capital. Mr al Naimi's remarks carry particular weight in the group since the kingdom is the largest oil producer. His comments follow predictions by several members that output levels will remain unchanged as oil prices appear to be recovering.

Falah Alamri, Iraq's OPEC representative, told Dow Jones yesterday there were "no excuses to change current production levels". "Prices are comfortable and don't add pressure on ministers to change output," he said. Top officials in Algeria and Kuwait have also spoken against a new cut in the group's production. Oil prices have rebounded by more than 25 per cent since OPEC last met on March 15. OPEC pledged in December to take a total of 4.2 million barrels per day (bpd) of oil off the world market from Sept 1 production levels, a move that was widely credited with fuelling this spring's rally.

Some analysts, however, have warned that the price jump is not supported by fundamentals, as the amount of oil in storage remains high and a recovery in the world economy, which would pump up oil demand, appears distant. Iran's OPEC representative, Mohammed Ali Khatibi, told Dow Jones on Sunday that the group should cut output to reduce the amount of oil in storage. "As an expert, if you find the market is oversupplied, the solution is very clear," he said.

Mr al Naimi indicated he was satisfied with the group's commitment to the output reductions. "Always we will wish for better compliance, but the compliance is good anyway," he told Bloomberg. * with agencies cstanton@thenational.ae