Saudi Energy Minister Khalid al-Falih: Oil market is heading in the right direction, although rebalancing still needs time

OPEC

Asharq al-Awsat, a London-based newspaper reported on Monday about Saudi Energy Minister Khalid al-Falih’s comment about the status of the oil market nowadays. With regards to the progress and improvement of the market, despite of the previous slips and abrupt falls, Khalid al-Falih said that the oil market is heading in the right direction, although, the market still needs time to rebalance.

In addition, he also told the newspaper that the current expectations which indicate the market will rebalance in the fourth-quarter of this year, which will take into an account an increase in the shale oil production. On the other hand, when Khalid al-Falih was asked about the recent oil price drop, he claimed that: markets determine prices; however they are also driven by unpredictable variables beyond the control of producing nations.

In accordance to this, oil prices dropped on Monday, this is weighed down by a continuing growth in United States drilling that has helped to maintain high global supplies despite an OPEC-led pledge to tighten the market by cutting output. In addition, the price of oil is down around 14% since late May, this is when producers led by OPEC extended their pledge to cut supply for about 1.8 million barrels per day, which will take effect up until the first-quarter of 2018.

Khalid al-Falih claimed that there was a relatively big draw of around 50 million barrels from floating storage and a drop in industrialized nation’s shortage of 65 million barrels compared to July last year.

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