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Saudi Arabia said on Friday it is consulting other oil producers in and outside OPEC to ensure the world has adequate supplies to support economic growth after prices hit $80 a barrel for the first time since 2014.OPEC´s most influential energy minister. Saudi Arabia´s Khalid al-Falih. said in a Twitter post that he had called his counterparts in the United Arab Emirates. the United States and Russia. as well as major oil consumer South Korea. to `coordinate global action to ease global market anxiety`.
Falih also said he had reassured the executive director of the International Energy Agency of `commitment to the stability of oil markets and the global economy` and that he would contact others over the next few days.
On Thursday. Falih called Indian Petroleum Minister Dharmendra Pradhan to assure him that supporting global economic growth was `one of the kingdom´s key goals`. the Saudi government said in a statement. after India expressed frustration with the recent surge in oil prices.
Oil prices held firm on Friday. with Brent crude trading at around $79.70 per barrel after the international benchmark broke through $80 for the first time since November 2014 the previous day.
The Saudi Energy Ministry said on Thursday that the kingdom together with other producers would ensure the availability of adequate supplies to offset any potential shortfalls.
The Organization of the Petroleum Exporting Countries and its ally Russia have cut their output since January 2017 to help reduce excessive global stockpiles.
So far. OPEC has said it sees no need to ease output restrictions despite a fall in global stocks to the group´s desired levels and concerns among consuming nations that the price rally could lead to demand destruction.
OPEC member the UAE said on Thursday OPEC had bigger issues to consider than the impact of the U.S. decision to withdraw from the international nuclear deal with oil producer Iran. such as Venezuela´s collapsing oil output.
U.S. President Donald Trump has also called on OPEC to help cool oil prices. saying they were artificially high.
Meanwhile BP Chief Executive Bob Dudley expects a flood of U.S. shale and the reopening of OPEC taps to cool the oil market after crude rose above $80 a barrel this week.
President Trump´s decision to exit an international nuclear deal with Iran and revive sanctions on the OPEC member country. as well as Venezuela´s plummeting output. has helped to lift oil prices to their highest since 2014.
But BP sees oil falling to between $50 and $65 a barrel due to surging shale output and OPEC´s capacity to boost production. Dudley told Reuters.
`Clearly the withdrawal of the United States from the Iran nuclear deal has brought a lot of uncertainty to the market.` he said in an interview.
Crude exports from Iran. the third-largest member of the Organization of the Petroleum Exporting Countries. could drop by 300.000 to 1 million barrels per day (bpd) as a result of U.S. sanctions. the CEO said. citing internal BP forecasts.
Dudley said he expected the figure to be `at the lower end` of the range.
The 30 percent recovery in crude prices since February has given strong tailwind to oil companies such as BP. whose profits recovered last year after a three-year slump in the market.
The U.S. Energy Information Administration this month boosted its forecast of growth in domestic crude production in 2018 to an all-time high of 11.17 million bpd. as shale drillers accelerate activity.
The surge in U.S. output has been offset by deep supply cuts for over a year by OPEC and other producers including Russia.
Markets have so far been able to absorb oil´s rise without impacting demand growth. but Dudley said a sustained crude price of over $80 would be unhealthy.
`Two years ago. when the price was $27. it was great for global growth. the engines of the consuming economies. but it was terrible for producing countries and that led to producing countries not being able to purchase things as well. That was not a healthy price.`
`I think when you get above $80. it is not a healthy price either.`
BP expects consumption to expand by 1.7 million bpd. extending a period of strong growth. The world has experienced an unprecedented decade of economic growth that is likely to continue even with sanctions and trade tensions between the United States and China. Dudley said.
`We´re about to begin to see political factors creating trade dislocations. sanctions and things like that.
They will have impacts here and there but the overall economic growth rates appear to be not overheated.` he said.
