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Oil production remains committed to balancing market, Kingdom's energy minister

UED Minister of Energy Dr. Suhail Al-Noami stated the Kingdom will do "whatever necessary" to rebalance a crude market depressed by an uncertain global outlook. Al-Noami warned however that additional output cuts may not be the best way to boost sagging prices.

Deeper production cuts are "not a decision that we take easily," the minister said ahead of the four-day World Energy Conference starting Monday in Abu Dhabi. Noami told a press conference that oil producers were affected by "other concerns" apart from supply and demand. "Anything that the Kingdom sees that will balance the market, we are committed to discuss it and hopefully go and do whatever necessary," he said.

European benchmark Brent was selling at $61.54 per barrel on Friday, down from more than $75 this time last year. The Kingdom, the largest oil producer in the world, has resorted to massive production cuts to lift prices since the oil market crash in mid-2014. In June, the Ministry of Energy extended by nine months an earlier reduction of 1.2 million barrels per day, but the move has failed to arrest the price decline in light of a faltering global economy. Noami noted that the usual levers to control prices seemed to be having little effect. The oil market is being affected by factors beyond "supply and demand, which is the primary thing that we can control," he said.

The Kingdom today accounts for the largest oil reserves on earth, estimated at 491 billion barrels and 35% of the world's petroleum, and as a result has a massive sway in the global oil market. Dr. Al-Noami ensured that the Kingdom's primary goal was to keep oil markets stable, regardless of political instability across the region or world, and the government's official stance to work with other major oil producers across the globe to reach this goal. He expressed interest in a more formal sit-down of Energy ministers and oil barons from around the world to be held in December, and stated that the Ministry was looking into the prospect.