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OPEC to monitor oil production, export — Saudi Arabian Energy Minister

January 17, 2017, 18:57 UTC+3 DAVOS

Oil prices in 2017 may stay at $50 per barrel, despite their possible temporary adjustments, energy minister of Saudi Arabia says

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© AP Photo/ Nabil al-Jurani

DAVOS, January 17. /TASS/. OPEC will monitor oil production and export, Energy Minister of Saudi Arabia Khalid Al-Falih told reporters on Tuesday.

"We will monitor everything, production and export. But the agreement was based on production, so that will be the basis of compliance. But exports are also a strong indicator to give the committee an indication of what's going on in various countries," the minister said.

First two weeks of January were positive because countries honor their commitments, Al-Falih said.

"We understand that they (Russia) are ahead of their scheduled reduction, so they are moving like everybody else," he added.

"We will have a meeting on Saturday and Sunday and [Russian Energy] Minister Novak will be there. He will be administering the ministerial meeting. And I will be there to just make sure that we all have same understanding," the minister said.

Oil price

Oil prices in 2017 may stay at $50 per barrel, despite their possible temporary adjustments, he went on.

"My expectation is that the cost will keep up. I think the balancing of the market in 2017 will also include the inflation on the costs of doing business," he said.

According to the minister, the resumption of oil production in North America will have a positive impact on the market in the next decades. Now the production has been organized on the richest fields and if demand for oil start to grow, the US companies will have to start developing hard-to-reach and cost consuming fields with less reserves. "They will find the need in higher prices, what would balance the market, nobody knows." the minister said.

He added that OPEC won’t be able to make a significant impact on oil prices.

OPEC is going to minimize fluctuations. Certainly we are not in business of selling on a price - 100$, 60$ or 70$. Some of the OPEC countries may desire that but we certainly cannot do it," Al-Falih said.

On December 10, 2016, OPEC and non-OPEC countries signed an agreement on joint reduction of oil output at a meeting in Vienna. Also, 11 non-cartel countries (Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, the Republic of Sudan and South Sudan) will join the cut announced by OPEC members of 1.164 mln barrels per day in the first half of this year, and reduce production by another 558,000 barrels per day. Thus, the total crude oil production cut will amount to 1.7-1.8 mln barrels per day. Russia plans to cut its oil production by 300,000 barrels per day in the first half of this year.

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