Menu Search Facebook Twitter
Search Close
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers

Saudi Arabia Says Another OPEC Cut Possible in 2017

OPEC agreed in late November to cut its production by 1.2 million barrels a day to 32.5 million barrels, the first reduction agreed to by the cartel since 2008

Oil workers weld a pipeline at PDVSA's José Antonio Anzoategui industrial complex in the state of Anzoategui, Venezuela, April 15, 2015, photo: Reuters/Carlos Garcia Rawlins, File
11 months ago

DAVOS, Switzerland – OPEC countries could cut oil production again this year, Saudi Arabia’s energy minister said Thursday.

Speaking at the World Economic Forum at the Swiss ski resort of Davos, Khalid Al-Falih said he “would not exclude” another cut to follow last year’s agreement if higher prices don’t stick because of variables outside producers’ control, such as a potential collapse in demand.

“I think Plan B is to be resilient and to be flexible and to deal with the circumstances,” he said.

“There have been times in the past where OPEC has taken one action and then a few months later found out that that action was not sufficient and followed up with another action,” he said. “We will not exclude that and that’s why we’re meeting up again in May.”

Asked if that could involve further cuts, the minister said “if needed, absolutely.”

However, he said his baseline expectation is that it “will not be necessary.”

OPEC agreed in late November to cut its production by 1.2 million barrels a day to 32.5 million barrels, the first reduction agreed to by the cartel since 2008. Nearly a dozen other countries, including Russia, pledged in December to cut an additional 558,000 barrels a day.

Those cuts are due to expire in June and Al-Falih said an extension is also possible.

He warned that extending the cuts “could create a shortage too early which we don’t want to.”

“But if we find out … that it’s not enough, we will do what is necessary.”

Oil prices are trading over $50 a barrel, nearly double the level they were a year ago, largely because of the production cuts.

For higher oil prices to stick, producers will have to show they are complying with their agreements.

Earlier Thursday, the Paris-based International Energy Agency said global oil output is dropping for the first time in months, as Saudi Arabia and other oil-producing countries follow through on the pledged cuts.

The IEA’s monthly report on Thursday showed OPEC production dropped to 33.09 million barrels a day in December from 34.2 million the previous month.

The IEA’s executive director, Fatih Birol, cautioned that the higher oil prices prompted by the production cuts could see a rise in output from U.S. shale gas producers.

And that newly increased supply could weigh on oil prices.

“Don’t underestimate the shale gas reaction,” he said.

Oil prices shot up to more than $100 a barrel in mid-2014 before a long slide sent them crashing below $30 in early 2016.

A number of factors hit prices, including worries over the scale of the economic slowdown in China and high supply from OPEC countries, notably Saudi Arabia, as they seemingly strove to drive U.S. shale gas producers out of business.

Now the higher prices may entice those shale gas producers to ramp up production again.


Comments Whatsapp Twitter Facebook Share
More From The News
Latest News

Democrat Jones wins stunning red-state A ...

5 days ago

Asian stocks mixed ahead of Fed rate ann ...

5 days ago

NFL Network suspends analysts over sexua ...

5 days ago

Minnesota announces restrictions on usin ...

5 days ago
Most Popular

IMF Seeks Contingency Plans for Vulnerab ...

By The News

In the Market for a Diamond? Lucky You.

By The News

Taste for Bacon Spurs Investor Feast as ...

By The News

Moody's Lowers Mexico's Credit Foresight ...

By The News

Venezuela Says Better Oil Loans Deal Was ...

By Reuters