Saudi Arabia's Energy Minister Khalid al-Falih stated on Wednesday that the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers need to continue moderating the crude production in the second half of this year in order to stabilize the oil market. Speaking in an interview with CNBC, the official added that it is "difficult to predict where we will be in June when interim agreement runs out."
Al-Falih stressed that the uncertainty over the production in Libya and Venezuela creates potential risks in the oil market. He also noted that the transparency in the oil market "is not perfect yet" due to the lack of relevant data. Commenting on whether the OPEC+ will decide to prolong the output cut deal, the minister said that the major oil exporters "remain flexible" and that he is "leaning towards a likelihood of an extension."
The Saudi official highlighted that OPEC's main priority is the global economy and ensuring market stability. He also praised the cartel's efforts to rebalance the market, noting that those "actions have benefited also producers outside OPEC+," calling it "the next best thing to perfection." Al-Falih added that producers want to avoid the piling up of inventories because that will most likely lead to oil price spikes and global recession.
