Saudi pledges adherence to oil cut, confident others will

Mon Jan 16, 2017 8:38am EST
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By Rania El Gamal and Maha El Dahan

ABU DHABI (Reuters) - Saudi Arabia will adhere strictly to its commitment to cut output under the global agreement among oil producers, its energy minister said on Monday, expressing confidence that OPEC's plan to prop up prices would work.

Saudi Energy Minister Khalid al-Falih, speaking at an industry event in Abu Dhabi, also said he was encouraged by signs of commitments by other participants in the deal since it took effect on Jan. 1.

"Many countries are actually going the extra mile and cutting beyond what they've committed... I am confident about the impact... and I am very encouraged about those first two weeks," Falih said.

The comments are the latest in a series of assurances from officials that participants will follow through on the agreement intended to help get rid of a glut. Compliance with the deal will be a key influence in early 2017 on oil prices LCOc1, which at $56 a barrel are about half their level of mid-2014.

Under the accord, the Organization of the Petroleum Exporting Countries and Russia and other non-members will curtail oil output by nearly 1.8 million bpd, initially for six months.

Last week, Falih said Saudi output had fallen below 10 million bpd, meaning Saudi Arabia had cut production by more than the 486,000 bpd which it agreed to late last year under the producers' agreement.

On Monday, he said: "We will strictly adhere to our commitment," adding that during the six-month agreement, Saudi output would either be at the kingdom's target under the deal or "as is the case now, slightly below".

Producers were unlikely to extend the deal beyond six months and would allow market forces to prevail once the supply glut is eradicated.   Continued...

Saudi Arabia's Energy Minister Khalid al-Falih addresses a news conference after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, December 10, 2016. REUTERS/Heinz-Peter Bader