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Sun 31 Jan 2016 02:25 PM

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Saudi Arabia wants to cooperate to support oil market

Saudi Arabia didn't make output cut proposal - source told Arabiya TV

Saudi Arabia wants to cooperate to support oil market
(Bloomberg)

Saudi Arabia wants to cooperate with other oil producers to support the oil market, Saudi-owned al-Arabiya television reported on Sunday, quoting an unnamed Saudi source.

The Dubai-based satellite channel also reported that Saudi Arabia was not the source of a proposal to cut oil production that Russia was studying, quoting the unnamed source.

Russian Energy Minister Alexander Novak said on Thursday that OPEC had proposed output cuts of up to 5 percent to help reduce a glut of crude and prop up sinking prices, in what would be the first such deal globally in over a decade.

It was not clear if Novak was referring to a months-old proposal by OPEC members Venezuela and Algeria, or a new one backed by Saudi Arabia. Sunday's Arabiya report implied the proposal was not new.

The Saudi source's comments were in line with remarks made by a senior Gulf OPEC delegate to Reuters on Thursday.

Saudi Arabia has long said it is willing to act to stabilise prices but that the other countries, particularly higher-cost producers, must also reduce their output.

The possibility of supply restraint by producers boosted oil prices to almost $36 a barrel last week from a 12-year low close of $27.

But there is widespread scepticism that a deal will happen, especially since Iran is keen to boost its market share now that sanctions on it have been lifted.

The source also told the Dubai-based satellite channel that the kingdom was not the source of a proposal to cut production that Russia was studying.

Russia said on Thursday that OPEC had proposed oil production cuts of up to 5 percent in what would be the first global deal in over a decade to help reduce a glut of crude and prop up sinking prices.

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William 4 years ago

Why be afraid of competition? Deal with it. This is basic economics. When the cartel took the upper hand during the previous years, they did not care about the others and now they are afraid when the others increased production. If the neighboring countries of the cartel start oil exploration and sell directly, then not only they have to face the competition in the market but also the one below the ground of who will get the most.

Steve 4 years ago

I have lived in the KSA and Qatar and know that oil is the crown jewel of these countries and many others in the region. What baffles me is how these OPEC neighbors are willing to part with their jewels for such a low price. I know that managers and authorities in the Middle East are hesitant to make a decision because of the fear of being wrong. Well, I say make a decision to lower production by 10% and try being a leader for a change.
Shukran