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Falih Sees No Need to Adjust Oil Pact

Falih Sees No Need to Adjust Oil PactFalih Sees No Need to Adjust Oil Pact

There is no evidence a pact by global oil producers to curb output needs to be adjusted, Saudi Arabian Energy Minister Khalid al-Falih said on Saturday, describing the recent weakness in crude prices as an overreaction to statistical glitches.

Falih also said the decision by Saudi Arabia and some of its allies to cut ties with Qatar this week would not affect the oil pact, CNBC reported.

"I do not expect the diplomatic and political issues that have surfaced with Qatar to have any impact whatsoever on the oil production agreement," he told reporters in Kazakhstan.

Crude prices fell about 4% this week after US data showed a surprise 3.3 million barrel rise in crude inventories to 513.2 million barrels. Falih said the data was a "local phenomenon."

"Time will correct for this statistical glitch that we saw last week," he said, adding that the results of last month's agreements to extend a global production cut would "materialize over weeks and months."

"I am convinced that the overall trend for the market is that of rebalancing," he said.

Falih said he discussed the oil market with Kazakh Energy Minister Kanat Bozumbayev and Russian counterpart Alexander Novak in the Kazakh capital on Saturday.

Novak said after the meeting on Saturday that Kazakhstan is committed to fulfilling the agreement.

As part of a global deal between the Organization of Petroleum Exporting Countries and non-OPEC countries, Astana pledged to keep overall production at 1.7 million barrels per day.

Bozumbayev had said last month that Kazakhstan would need to adjust the terms of the deal as it expects to boost output later this year thanks to the giant Kashagan field.

 

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