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Saudis make case for keeping oil cuts while Russia open to change

Saudis make case for keeping oil cuts while Russia open to change

Jeddah, May 21 - Neftegaz.RU
. Saudi Arabia's energy minister Khalid al-Falih laid out his case for OPEC and its allies to continue their oil production cuts, despite fraught geopolitics, saying global supplies are still plentiful and inventories high, Platts repprted.

"My recommendation to my colleagues will be to drive inventories down to stay on the trajectory to bring inventories down to a normal level," Falih said, ahead of a meeting of the OPEC/non-OPEC Joint Ministerial Monitoring Committee that he co-chairs with Russian counterpart Alexander Novak.

Falih said Saudi crude production would remain around 9.7 million to 9.8 million b/d for May and June, well below its quota of 10.31 million b/d under the deal.

Novak told reporters that the committee may consider proposals that include easing up on the 1.2 million b/d in supply cuts that the coalition has implemented since January. The cuts are set to expire in June.

"Today we are looking at various options [for the second half of 2019] including softening the production [quotas]," Novak said.

Non-OPEC Russia has been less eager to lock in further cuts, though Vladimir Putin has said he sees political benefits to continuing engagement with OPEC.

Falih said the coalition is focused on not allowing oil inventories to "skyrocket," and that recent rising tensions between Saudi Arabia and Iran would not derail cooperation on oil market management.

"We are focused on bringing fundamentals to a balance point and will not be distracted by geopolitics," Falih said.

Any changes to the coalition's production policy would be made at its next full meeting, June 25-26 in Vienna.

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