Saudi Arabia said it was flexible regarding the extension of a deal between OPEC, Russia and other producers on cutting oil supplies until the end of next year. Saudi Energy Minister Khalid al-Falih suggested though that the output freeze deal could run to the end of 2018. “In the kingdom, we have to keep all options open, President Putin agreed with us on this and expressed his readiness to extend until the end of 2018 if this is agreed, and if this is the best option,” he said.
Mr. al-Falih welcomed the “flexibility” shown by Russia and reiterated that the Saudi government also wanted to “be flexible in leading the producing countries in and outside of OPEC to a consensus that takes the market to where we want it to be.” Riyadh and Moscow helped secure a deal between the OPEC and 10 competitor suppliers to cut output until March 2018 in an effort to tame global crude supply. Oil prices went up above $56 a barrel last week, triggered by expectations of an extension to the supply cut pact.
Mr. al-Falih, however, said that rising US shale production did not bother him that much since inventories were still falling. “Shale coming in and happening again in 2018 doesn’t bother me at all. The market can absorb it,” he said, speaking alongside Russian Energy Minister Alexander Novak in Moscow. “We have seen a steady reduction in inventories. We see as we enter the fourth quarter that supply is less than demand and inventories are declining around the world,” Falih said. Mr. Novak also added that Russia would like to see more countries join in the freeze deal.