Saudi energy minister says worst is over for oil market

DUBAI/LONDON: Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said on Monday that the worst was over for the oil market.

"I guess the worst part is over," Prince Abdulaziz said at the virtual India Energy Forum by CERAWeek when asked to comment on the status of the oil market recovery.

"We are still vigilant. I think there is a big shift all together in terms of where we are today and where we were in April and May," he said.

The Organization of the Petroleum Exporting Countries (Opec) and allies including Russia made a record oil output cut in April as the pandemic hit demand. They are scheduled to increase output in January as part of a gradual easing of crude supply curbs.

Russian President Vladimir Putin, speaking last Thursday, did not rule out extending the oil cuts for longer if market conditions warranted.

Separately, Opec's secretary general said on Monday an oil market recovery may take longer than hoped as coronavirus inflections rise around the world, and Opec and its allies would "stay the course" in balancing the market.

Mohammad Barkindo, asked at CERAWeek if the second wave of the virus required any changes to Opec+ strategy, said hopes earlier this year of a demand rebound had been disappointed.

"We were hopeful the second half of 2020 would begin to see a recovery," Barkindo said. "Unfortunately, both the economic growth and demand recovery remain anaemic at the moment due largely to the virus."

"We remain cautiously optimistic that the recovery will continue. It may take longer, maybe at lower levels, but we are determined to stay the course," he added.

Barkindo said producers did not expect a renewed oil-price collapse as seen in the second quarter, when oil hit historic lows with US crude briefly trading in negative territory.

Opec+ producers had met an average of 100% of their supply cut commitments and would continue to implement the curbs so that inventories fall further, Barkindo said.

"We are determined to assist the market to restore stability by ensuring that the stock drawdowns continue." – Reuters