Saudi Minister confident that low oil prices are a concern of the past.
Saudi Oil Minister Khalid al-Falih said on Sunday that the prevailing cycle of slumping crude prices is close to an end as market fundamentals change.
That said oil prices fell early on Monday morning as Iraq said it wanted to be exempt from any deal by producer cartel OPEC to cut production to prop up the market.
Brent crude futures were trading at $51.59 per barrel at 0133 GMT, down 19 cents, or 0.4 percent, from their last close.
Oil prices are currently floating at around $50 per barrel after dropping a 10-year low of less than $30 in January, declining from a peak of more than $100 in mid-2014.
But the confident Falih informed a joint press conference with his Russian counterpart Alexander Novak on Sunday after a Gulf ministerial meeting in Riyadh, “The prevailing down cycle is approaching an end. Market fundamentals, regarding supply and demand, have begun to change, we are hopeful that oil prices will continue to increase in the future.”
Qatar’s energy minister, Mohammed al-Sada, whose country holds the rotating presidency of the OPEC the ,oil exporting cartel, also said on Sunday “Although the market is heading to being balanced, it needs our joint effort, and we all acknowledged that we need to take actions to bring back this balance.”
Traders stated the price falls followed comments from Iraq, “we are not going back in any way, not by OPEC not by anybody else,” said Falah al-Amri, the head of Iraq’s State Oil Marketing Company.
OPEC planned on reducing production to a range of 32.50 million to 33.0 million barrels per day (bpd), down from 33.39 million bpd in September. That would be hard to accomplish if Iraq, which is OPEC’s second-biggest producer after Saudi Arabia, didn’t participate.
Novak said he and his Gulf counterparts had considered ways to “develop the best mechanism to resolve the issue of stabilization, by reaching an unparalleled level of our relations and cooperation with Saudi Arabia.”
OPEC has invited Russia and key non-members to a meeting later this month as the cartel, and Moscow seeks to tighten cooperation to support historically low crude prices.
($1 = ৳78.51)