However, Saudi output hit a record high in July and the markets are jittery ahead of an informal meeting of the Organization of the Petroleum Exporting Countries that starts in Algeria on September 26.
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From 2014 until earlier this year, Saudi Arabia’s then-minister for oil, Ali al-Naimi, offered little verbal support for prices.
Russian Energy Minister Novak said that with prices around $50 a barrel, it isn’t necessary for major oil producers to discuss freezing production levels, according to news reports.
Vanguard, however, gathered that the Prime Minister of Iraq, Haider al-Abadi, said that it will support OPEC’s decision tofreeze oil production in order to prop up the downturn of crude price at the global.
Prince Mohammed has said he expects the initial public offering (IPO) to value Aramco at at least $2 trillion, but that the figure might end up being higher. “Saudi Arabia does not want to crash the price”.
Moreover, Shell’s Chief, Energy Adviser, Wim Thomas, has said that the huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017.
Speaking during an official visit to China Wednesday, Khalid al-Falih told the al-Arabiya TV channel that, despite low crude prices, he was optimistic about global demand, that demand for crude in China remains “very healthy” and India’s demand was “very good”, too, Reuters reported.
The price of oil looks set to continue to fall in the short term as Saudi Arabia persists in flooding the market with crude and plans to raise funds to fill any resulting holes in its budget and diversify its oil-dependent economy.
The West Qurna 1 field, developed by Exxon Mobil, and South Oil’s Luhais and Artawi fields contributed most to the increase, according to sources at South Oil.
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But despite the behind-the-scenes talks, OPEC delegates and industry sources are skeptical that the tone shift will be backed with concrete action either by the Saudis or producers collectively. “It speaks to the broader idea of improved efficiency and declining costs, and has bulls anxious about the ability of production to hang on at these prices”. He says the world needs oil above $50 per barrel to achieve a balanced market, and raised the prospect of Saudi Arabia resuming its role of balancing supply and demand.
