Saudi Energy Minister Says Russia Helped To Breathe Back Life Into OPEC
Saudi Arabia’s energy minister said that Russia has helped to breathe new life into OPEC and that shale can be a major contributor to the market in years to come.
“This partnership between Russia and Saudi Arabia has catalyzed cooperation of an unprecedented coalition of 24 countries (OPEC and non-OPEC). It has breathed back life into OPEC which found itself, quite frankly, unable to swing its production as supply was persistently high in 2014 and global inventories were steadily rising ahead of demand,” Saudi Arabia Energy Minister Khalid Al-Falih told CNBC on Thursday.
Al-Falih was optimistic that oil markets were continuing to rebalance, but added prices were not for him or his counterpart, the Russian Energy Minister Alexander Novak, to determine.
“(Prices) are ultimately for the markets to determine based on marginal cost of productions and expectations of supply and demand. But as I think of fundamentals I am more optimistic than I have been in the last two or three years, demand is healthy around the world in developed and developing countries.”
Speaking at a CNBC-moderated plenary session at Russia Energy week 2017, Al-Falih said that certain market predictions that shale producers would bounce back at certain price points had proven incorrect.
“We believe that the unreasonable expectations that shale will somehow spring up at certain prices and grow exponentially has been proven to be way unrealistic.”
“We welcome the contributions of shale as demand approaches 100 million barrels (per day) next year and continues rising,” he added. “In the years and decades to come, we want shale to continue to be a major contributor but we believe the pace of its growth will be more important.”