Opec ready to act on oil market needs

Jeddah - Oil group won't decide on output until late June when they are due to meet

Saudi Arabia's Energy Minister Khalid Al Falih said on Saturday that Opec will be responsive to the oil market's needs, but that he was not sure there is an oil shortage with data, particularly from the United States, still showing inventories building.
Speaking in Jeddah ahead of a ministerial panel gathering on Sunday by top Opec and non-Opec producers, including Saudi Arabia and Russia, Al Falih told Reuters Opec will not decide on output until late June when the group is due to meet.
The Organization of the Petroleum Exporting Countries (Opec), Russia and other non-Opec producers have agreed to reduce output by 1.2 million bpd from January 1 for six months, a deal designed to stop inventories building up and weakening prices.
"We will be flexible. We are going to do the right thing as we always do," Al Falih said of any decision at the meeting in June on continuing the reductions.
Al Falih said Opec is guided by two main principles: "One to keep the market in its direction towards balancing and inventories back to normal level. And two to be responsive to market needs. We will strike the right balance I am sure."
Opec's agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the Opec-led deal.
US President Donald Trump has called on Opec and the group's de facto leader, Saudi Arabia, and asked them to lower oil prices. Riyadh, however, is reluctant to boost supply quickly and risk a price crash.
Sunday's ministerial panel meeting, known as the JMMC, comes amid concerns of a tight market as Iran's oil exports are likely to drop further in May, and shipments from Venezuela could fall more in coming weeks due to the sanctions by Washington.
"I am not sure there is a supply shortage, but we will look at the [market] analysis. We will definitely be responsive and the market will be supplied," Al Falih said.
"All indications are that inventories are still rising. We saw the data from the US week after week, and they are massive increases, so obviously [there is] supply abundance."
Prices slip, but end week higher
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over supply disruptions in Middle East shipments due to US-Iran political tensions.
Brent crude fell 41¢, or 0.6 per cent, to settle at $72.21 a barrel. The global benchmark notched a weekly gain of about 2 per cent, having ended last week largely steady and fallen the week before.
US West Texas Intermediate crude fell 11¢ to end the session at $62.76, and gained about 1.7 per cent on the week.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration said on Wednesday.
An Opec and non-Opec technical committee found that oil producers' compliance with the supply-reduction agreement reached 168 per cent in April, three sources told Reuters on Saturday.
The committee known as the JTC met ahead of the JMMC gathering to discuss the oil markets.
Stocks building up: UAE minister
Meanwhile, Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry, on Saturday said that global oil inventories are still building up particularly in the US, and that the job by Opec and its allies to balance the oil market is not complete yet.
He told reporters in Jeddah that conformity with the oil supply cuts are "excellent" and that he was happy with the UAE's compliance level.