OPEC hasn't run out of ideas, Saudi energy minister insists as oil prices slump
- His comments came amid speculation that there is tension in the alliance, known as OPEC+, over whether to cut oil production further.
- Prices continue to be weighed on by ample supply and falling demand and, lately, fears surrounding the coronavirus and its impact on the global economy.
OPEC and its allied oil-producing nations are still working well together and still have options to try to rebalance global crude markets, Saudi Energy Minister Prince Abdulaziz bin Salman said Tuesday.
"We do communicate with each other, we use every opportunity to talk with each other," he said, speaking to reporters at the ICCUS conference in the Saudi capital of Riyadh.
"We did not run out of ideas, we haven't lost our phones and there are always good ways of communicating through conference calls and technology is very helpful."
His comments came amid speculation that there is tension in the alliance, known as OPEC+, over whether to cut oil production further. Prices continue to be weighed on by ample supply and falling demand and, lately, fears surrounding the coronavirus and its impact on the global economy.
Prince Abdulaziz insisted that the producer countries in the alliance communicate and he was "confident of our partnership," adding that every producer was a "responsible" one.
OPEC and its non-OPEC allies, led by Russia, will meet in Vienna on March 5-6 but there is uncertainty over whether the entire group will agree to cut their collective oil output further with rumors that Russia is still undecided. As it stands, the alliance has reduced its total oil output by 1.7 million barrels a day in a bid to stabilize oil prices.
The technical committee of OPEC+ met earlier in February to debate a possible oil output cut but the meeting ended with no solid recommendation.
The Saudi minister referred to a statement made last week by his Russian counterpart, Energy Minister Alexander Novak, in which Novak said Russia had not yet made a decision on any further cut and that it continued to discuss the matter with its OPEC partners.
Prince Abdulaziz said the statement showed that Novak remains "positively engaged." "I'm confident of our partnership as OPEC+, I'm confident that everyone in the OPEC+ is a responsible and responsive producer."
Oil prices steadied on Tuesday after crude benchmarks slumped almost 4% in the previous session on concerns over the impact of the coronavirus on already dented global demand and a build in U.S. crude oil inventories. Brent crude for April delivery was trading at $56.79 per barrel Tuesday, while West Texas intermediate (WTI) was trading at $51.87.
Sheikh Mohammed bin Khalifa Al Khalifa, Bahrain's oil minister, told CNBC Tuesday that a cut of 600,000 barrels a day, as suggested by OPEC's joint technical committee, could be considered at next week's OPEC meeting.
"If the market mechanism and the consensus is yes then, absolutely, yes," he told CNBC's Dan Murphy in Riyadh. "It's (the OPEC, OPEC+) mechanism has proven very effective to balance markets and that's what it's there for. There is a temporary need to make some measures," he said.
"Let's see what happens, continuing the cuts is certainly an important thing and making sure countries are compliant is critical and if there is a need for further cuts, obviously, being a market-balancing force they'll have to do the necessary things."