By Rania El Gamal and Vladimir Soldatkin
JEDDAH, Saudi Arabia (Reuters) – Saudi Energy Minister Khalid al-Falih said on Saturday that he saw no shortage of oil as global oil stocks continue to rise. , especially in the United States, but that OPEC would meet the needs of the oil market. .
Speaking in Jeddah ahead of Sunday's ministerial meeting bringing together major OPEC and non-OPEC producers, including Saudi Arabia and Russia, Mr Falih said: told Reuters that OPEC would only decide on production in late June, when the group will meet soon.
"I'm not sure that there is a supply shortage, but we will look at the (market) analysis.We will certainly be responsive and the market will be supplied," said Falih, to the demand for the expected increase in production. to the concerns of oil shortage.
"But all indications are that inventories continue to rise.We have seen data from the US week after week, and there are massive rises.There is therefore clearly an abundance of l & # 3920; offer."
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC producers, known as OPEC +, have agreed to reduce their production of 1.2 million barrels a day from January 1 for a period of six months, an agreement to stop stocks construction and lower prices.
"We will be flexible, we will do the right thing as we always do," Falih said of any decision taken at the June meeting to continue the cuts.
Falih said that OPEC was guided by two fundamental principles: "One to keep the market in its direction of equilibrium, and stocks are (are) normal again. And two to be in Listening to the needs of the market.We will find the right balance, I'm sure of it. "
Saudi Arabia does not see the need to rapidly increase production with oil prices around 70 dollars a barrel, fearing a drop in prices and a build-up of stocks, sources said. ; OPEC. But Russia wants to increase the bid after June, when the current OPEC + pact must expire, the sources said.
The United States, which is not a member of OPEC + but is a close ally of Saudi Arabia, wants the group to boost production to lower oil prices.
Falih must strike a delicate balance between maintaining the well-supplied oil market and prices high enough to meet Riyadh's budget needs, while allowing Moscow to ensure that Russia remains in the OPEC + pact and taking into account concerns of the United States and the rest of the world. OPEC +, the sources said.
The agreed share of OPEC cuts is 800,000 barrels a day, but its actual reduction is much larger because of production losses in Iran and Venezuela. Both are subject to US sanctions and are excluded from voluntary reductions resulting from the agreement with OPEC.
US President Donald Trump has called on Saudi Arabia, OPEC and the group leader, to lower oil prices.
Sunday's ministerial meeting, known as JMMC, responds to concerns over a tense market, as Iranian oil exports are likely to fall further in May, and shipments from Venezuela could fall further in May. next weeks because of the sanctions imposed by Washington.
Oil contamination has also forced Russia to interrupt flows along the Druzhba pipeline – a key crude oil vector in Eastern Europe and Germany – in April. The suspension, whose duration remains uncertain, left the refiners struggling to find supplies.
But US crude inventories rose unexpectedly last week and reached their highest level since September 2017, while gasoline inventories fell more than expected, the Energy Information Administration (EIA) announced on Wednesday.
Tensions between Saudi Arabia and Iran, a member of OPEC, are also exacerbated after last week's attacks on two Saudi oil companies off the United Arab Emirates and one of the largest oil companies in the world. another against Saudi oil facilities in the interior of the kingdom.
Saudi Arabia has accused Iran of ordering the attack of Saudi oil tanker Saudi Aramco's pumping stations claimed by the Houthi militia aligned with Yemen's Iran.
A technical committee of OPEC and non-OPEC countries found that compliance with the supply-reduction agreement by oil producers had reached 168% in April Three sources told Reuters on Saturday.
This shows that OPEC + producers reduce their production more than their share. Saudi Arabia has been pushing its production target since January to keep oil stocks and prices under control.
(Report by Rania El Gamal and Vladimir Soldatkin, edited by Tom Hogue and Ros Russell)