Oil producers discuss whether to increase output

Fredrick Soto
May 23, 2019

Falih said OPEC was guided by two main principles: "One to keep the market in its direction towards balancing, and inventories (are) back to normal level".

OPEC+ agreed to reduce output by 1.2 million barrels per day from the beginning of this year for six months in a bid to stop inventories building up.

"I think the market is taking a breath, waiting to see how inventories respond to refiners in the US returning back from maintenance", said Andy Lipow, president of Lipow Oil Associates in Houston.

Energy ministers from OPEC and its allies meet to discuss prices and production cuts, in Jiddah, Saudi Arabia, Sunday, May 19, 2019.

Last month, Russia halted supplies via the Druzhba oil pipeline to several European countries due to a contamination issue, which the Russians say was deliberate.

As the White House tightens its crackdown on Iran's oil sales, Saudi Arabia is under pressure to compensate by raising its crude production. He said the kingdom's oil output in May and June was planned to be 9.8 million bpd.

"I'm not somebody that wants to go into war, because war hurts economies, war kills people most importantly - by far most importantly", the United States president said. While being asked whether there would be any policy change on late June's meeting of OPEC and non-OPEC nations, Falih said, "We will be flexible".

The UAE's energy minister said there was no need to relax a deal by the OPEC+ group of oil exporting countries to cut output by 1.2 million barrels per day to support prices.

Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse.

"The UAE believes there is still time to study demand and supply", he said.

US hawks on Iran, led by National Security Adviser John Bolton, have reportedly advocated to confront Iran while Trump himself has showed restraint on further escalating the situation.

Iran said on Tuesday that it would resist US pressure, declining further talks under current circumstances.

Zarif told state news agency IRNA that Tehran did not want a war, and that no country had the "idea or illusion that it can confront Iran", the BBC reported on Saturday.

OPEC's agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela.

US President Donald Trump has warned Iran "never" to threaten the US again, saying if Tehran wants to fight, that will be the "official end" of the Iranian regime.

Two days earlier, four vessels, including two Saudi oil tankers, were sabotaged off the coast of the United Arab Emirates.

Saudi Arabia accused Iran of ordering the attack on state oil giant Saudi Aramco's oil pumping stations that Yemen's Iran-aligned Houthi militia has claimed responsibility for.

He said a sabotage attack against four oil tankers off the Emirates' coast had come at a "sensitive and hard period in the region". Trump administration officials are debating recent intelligence regarding whether Iran or the militias it supports are possibly planning to attack United States assets in the Gulf or whether it is acting defensively in an attempt to deter U.S. action.

"Although it has not affected our supplies, such acts of terrorism are deplorable", al-Falih said.

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