Saudi’s Falih says no immediate need to adjust oil pact

Leonhard Foeger | Reuters

OPEC President, Saudi Arabia’s Energy Minister Khalid al-Falih, and OPEC Secretary General Mohammad Barkindo talk to journalists before the beginning of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, May 25, 2017.

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.

“I don’t 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 percent this week after U.S. 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 would discuss the oil market with Kazakh Energy Minister Kanat Bozumbayev and Russian counterpart Alexander Novak in the Kazakh capital later on Saturday. “My expectation is that all three countries will continue to support the agreement fully,” he said.