FILE PHOTO: Saudi Energy Minister Khalid al-Falih speaks at a press conference in Riyadh, Saudi Arabia January 9, 2019. REUTERS / Faisal Al Nasser / File photo
9. March 2019
By Nidhi Verma
NEW DELHI (Reuters) – Saudi oil minister Khalid al-Falih said on Sunday that China and the United States will lead to a healthy global demand for oil this year, but that it would be too early to change OPEC + exit policy at the Group's next meeting in April.
He said total global demand for oil will grow by around 1
If you look at Venezuela alone, you will panic, if you look at the United States, you will say that the world is flooded with oil. You have to look at the market as a whole. We believe that demand in 2019 is actually quite healthy, says Falih to Reuters.
In Venezuela, suffering from a political and economic crisis, oil prices have risen by 40 percent to around 920,000 bps since Washington beats sanctions against its petroleum industry on Jan. 28.
On the other hand, production in the US hit a record of more than 12 million bpd in February.
The international energy agency in a report last month left the demand growth forecast for 2019 unchanged from January to 1.4 million barrels per day.
Falih said Chinese demand broke record month after month and estimated that the country would break 11 million barrels a day in 2019.
For Saudi Arabia, he said oil production in April was expected to remain at this month's level of 9 , 8 million bpd.
"Aramco completes the April awards today or tomorrow, so we want to know more on Monday. But my expectation is that April will be pretty much like in March."
The organization of the petroleum exporting countries and its allies as Russia, known as the OPEC + Alliance, meets in Vienna on 17-18. April and another collection is scheduled for June 25-26.
Falih said the group had not expected to change its production policy in April, and if necessary it will make changes in June.
"We want to see what's going on in April if there is some unforeseen disturbance elsewhere, but to prevent this, I think we should just kick the jug," Falih said.
"We want to see where the market is in June and adjust properly," Falih said.
On January 1, OPEC + new production savings began to avoid supply glut that threatened to soften prices. The Group agreed to reduce the offer by 1.2 million barrels per day for six months.
Sources recently stated that OPEC + production policy is expected to be agreed in June, with an expansion of the current pact, the probable scenario so far, but much depends on the extent of US sanctions on both OPEC members Iran and Venezuela.
OPEC's share is 800,000 bpd, to be delivered by 11 members – all except Iran, Libya and Venezuela, who are exempt from cuts. The baseline for the reduction was in most cases their production in October 2018.
(Reporting by Nidhi Verma; Editing by Kirsten Donovan)