Saudi Arabia prefers a nine-month extension to the OPEC/non-OPEC production cut agreement, its oil minister Khalid al-Falih said Thursday, though he acknowledged that "I only have one vote" out of 24 countries.
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But whatever decision ministers take, it will be subject to review at OPEC's next meeting in June or even "earlier if need be," Falih said, noting that a five-country monitoring committee will meet every other month throughout the deal to assess market conditions.
"At the end of the day, we need 24 countries to sign on to the decision," Falih told reporters ahead of OPEC's meeting.
He said OPEC's base case market analysis indicates that the 1.8 million b/d in OPEC/non-OPEC production cuts would need to continue through all of 2018 to bring down inventories to the five-year average.
"I don't expect in the next couple of quarters to change the course that we are in," he said. "But we need to consider [potential] surprises" in the market.
Falih added that OPEC producers were committed that any exit from the oil cut deal "will be gentle," but that it was still premature to consider how to end the cuts.
"I don't think we need to consider anything radical," Falih said. "From the outset, we've said we want this correction to the oversupply to be gentle. We don't want to rock the oil market or the global economy."
The deal calls on OPEC and its 10 non-OPEC partners, led by Russia, to cut 1.8 million b/d in supplies from October 2016 levels to hasten the market's rebalancing. It is scheduled to expire in March.
He reiterated his belief that US shale supplies would be needed to meet future oil demand, but that "we don't think shale can do it alone."
--Staff reports, firstname.lastname@example.org
--Edited by Jonathan Fox, email@example.com