Oil Prices Volatile After Saudi Output Pledge

Al-Naimi last spoke at IHS CERAWeek in February 2009, when the shale industry was in its infancy and Opec had just cut millions of barrels of production in an effort to revive oil prices amid a global recession.

Speaking on the sidelines of Iran’s Capital Market Roadshow in Muscat on Wednesday, Ali Akbar Sibeveh said his country is working with OPEC in favor of the oil market.

“This is more like a joke that they tell us they would freeze their production above 10 million barrels per day and that we should also in turn freeze our production at one million”, Bijan Zangeneh, Iranian oil minister, said on Tuesday. The country’s production has slumped since sanctions were imposed on its exports.

Al-Naimi insisted the oil supply glut was not caused by Saudi Arabia, but by high prices that caused “every barrel on Earth” to be produced.

Attiyah, a leading architect of Qatar’s rise to global prominence as gas exporter, said Opec would not cut production alone but added that Saudi Arabia, the world’s largest oil exporter and defacto leader of Opec, was willing to cooperate with other producers to balance the market. However, according to the American Petroleum Institute, U.S. crude inventories rose to 7.1million barrels which were way above the 3.0 million barrel build seen. Asia suffered a sharp drop in crude oil prices which fell from 1.54% to $31.38 a barrel.

“Saudi Arabia is going to continue pumping – that’s the bottom line”, said Tariq Zahir, managing member of Tyche Capital Advisors in Laurel Hollow, New York. However, Saudi Arabia indicated that they would do so only if other big oil producers also make a similar commitment.

Crude oil prices continued to slide on Wednesday, extending losses from the previous session.

The US government’s Energy Information Administration, which said last week that crude stocks hit a record high, releases its supply report at 1530 GMT.

Iraq is ready to cooperate on the output freeze, Falah Al-Amri, chairman of Iraq’s state Oil Marketing Organization, known as SOMO, said at conference in Abu Dhabi on Wednesday.

Iraq is negotiating with oil companies on their production targets after asking them to reduce their 2016 spending plans because of lower oil prices and cuts in government revenue.