Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Senior Saudi energy officials told top independent US oil firms in a closed-door meeting this week that they should not assume OPEC would extend output curbs to offset rising production from US shale fields. two industry sources told Reuters on Thursday.
Oil producers. led by Saudi Arabia and top non-OPEC exporter Russia. are in an uneasy truce with US shale firms after a two-year price war that sent many shale producers to the wall. The Saudis and Russia led a deal to curb output in late 2016 to end a global supply glut that pushed oil prices to a 12-year low. The resulting rise in oil prices has sparked a rush of new output by shale producers. who have outlined ambitious production growth plans across the United States.
Speaking at an industry conference in the US energy capital of Houston on Tuesday. Saudi Arabia`s Energy Minister Khalid al-Falih said that there would be no free rides for US shale producers benefiting from the upturn.
Falih`s senior advisors went a step further at the meeting on Tuesday evening with executives from Anadarko. ConocoPhillips. Occidental Petroleum Corp. Pioneer Natural Resources. Newfield Exploration and EOG Resources.
One of the advisors said that OPEC would not take the hit for the rise in US shale production. a US executive who was at the meeting told Reuters. He said we and other shale producers should not automatically assume OPEC will extend the cuts.
The Saudis called the meeting to exchange views on the market and to gauge the outlook for shale output. both sources said. Both sources spoke about the meeting on condition of anonymity due to the sensitivity of the matter.
The meeting came after OPEC Secretary-General Mohammed Barkindo met representatives of hedge funds and shale producers in Houston earlier in the week. seeking to widen talks on how to tame the global glut.
The Organization of Petroleum Exporting Countries joined forces with Russia and several other non-OPEC producers last November and pledged to cut production by about 1.8 million barrels per day for six months starting Jan. 1.
Falih said on Tuesday that global inventories had fallen more slowly than he expected in the first two months of the year. although oil market fundamentals were improving as a result of the curbs.
However. there are concerns that the glut could persist because shale supply. along with more output from Brazil and Canada. could offset output cuts by OPEC and some non-OPEC suppliers.
