Vienna — OPEC is under pressure from consuming nations to lift its productionquotas to ease tightness in the oil market, Saudi energy minister Khalidal-Falih said Thursday as the organization debates the future of itssupply cuts.
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Falih, who has pushed for OPEC to raise its output, said he sees demandin the second half of the year 2 million b/d higher than in the firsthalf. Meanwhile, production among OPEC and its 10 non-OPEC partners in asupply cut agreement has fallen 2.8 million b/d -- 1 million b/d more thanoriginally intended.
US shale production is also "likely to slow significantly over the nexttwo years" due to infrastructure constraints, he said in prepared remarksbefore the start of an OPEC/non-OPEC monitoring committee meeting, ofwhich he is chairman.
If the 24-country coalition keeps its cuts in place, the market deficit"could be an unacceptable 1.7 million b/d" and lead to a price spike,Falih said. "If we do not adjust our course we will run into differentproblems, losing credibility among consumers."
OPEC's customers "have spoken loudly, and we must listen to them," headded.
The US, a key Saudi ally, has lobbied OPEC to loosen its taps ahead ofthe summer demand season, with US President Donald Trump having tweetedhis displeasure with current price levels.
Russia, the largest non-OPEC participant in the cut agreement, is alsopushing for the coalition to lift its quotas by as much as 1.5 millionb/d.
But opposed are Iran, Iraq and Venezuela. All three countries attendedthe monitoring committee meeting, although their ministers did not speakduring the portion that was open to press.
Russian energy minister Alexander Novak, who serves as the committee'salternate chairman, said the coalition needs to be mindful not to allowthe oil market to overheat.
He added that the OPEC/non-OPEC supply cut agreement "assumesflexibility, which means we have to act on deficits and surplus."
"We should find a consensus on increasing production by mutuallyacceptable levels," Novak said. --Staff, email@example.com
--Edited by Valarie Jackson, firstname.lastname@example.org