Qatar and Saudi Arabia agree to freeze oil output

2/17/2016 9:12:17 AM

(MENAFN- The Peninsula) Minister of Energy and Industry H E Dr Mohamed bin Saleh Al Sada (centre) and Saudi Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al Nuaimi (second left) with Venezuela’s Oil Minister Eulogio Del Pino (left) and Russian Energy Minister Alexander Novak (second right) in Doha yesterday.

DOHA: Qatar has agreed with Saudi Arabia Russia and Venezuela to freeze oil output production at January levels provided that other producing countries from Opec and out of it do the same.

The announcement was made at a joint press conference here yesterday by Minister of Energy and Industry and Opec President H E Dr Mohammed bin Saleh Al Sada Saudi Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al Nuaimi Russian Energy Minister Alexander Novak and Venezuelan Oil Minister Eulogio Del Pino.

“This step is meant to stabilise the market” Dr Al Sada said describing the meeting in Doha as “successful.” He added that the meeting reviewed the current situation of the oil market and the short and long-term supply and demand. He said the trend of falling oil prices can’t continue highlighting the drop in oil investments while the demand for oil increases.

Dr Al Sada said talks will start with OPEC members and non-member oil producing countries and also with Iran and Iraq in order to maintain market stability and achieve benefit for oil producing countries as well as global economy QNA reported.

Al Sada added that he will lead talks in his capacity as Qatari minister of energy and industry and Opec president with support from the three ministers in order to reach an agreement with member states. “If these countries including Iran and Iraq agree to the proposal it will be implemented he said.

Al Nuaimi said the freeze is “the beginning of a process.” The situation will be monitored in the next few months to “decide whether we need other steps to stabilise and approve the market.”

“We don’t want significant gyrations in prices. We don’t want a reduction in supply. We want to meet demand and we want a stable oil price” he added.

The Venezuelan minister said he will meet his Iraqi and Iranian counterparts to discuss the production freeze proposal. The Doha announcement evoked mixed response from the global oil market.

Oil gave up early gains yesterday to trade lower after the ‘freeze’ announcement. Late European afternoon Brent North Sea crude was 78 cents down at $32.61 its session low having slipped from its $35.55 high just before the announcement. The US benchmark West Texas Intermediate for March delivery was down 51 cents from Monday’s closing level at $28.93.

“The news has disappointed the market slightly because some people had hoped to see a cut rather than a production freeze” an analyst said. “I don’t think it will have a huge impact on supply/demand balances because we were oversupplied in January.”

The Peninsula

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