Oil supply cuts by key producers could have negative implications for markets, the head of the International Energy Agency (IEA) said on Nov. 19, appealing to market players to use “common sense.”
IEA chief Fatih Birol, speaking at a news conference with central European energy ministers in Bratislava, said markets were currently well supplied but spare capacity in Saudi Arabia was thin and cuts by key players could tighten markets.
“Currently markets are very well supplied but we should not forget that spare capacity in Saudi Arabia is very thin, therefore cutting the production significantly today by key oil producers may have some negative implications for the markets and further tightening the markets,” he said.
“My appeal to all producers and consumers across the world is to have common sense in these difficult days.”
The Organization of the Petroleum Exporting Countries, led by Saudi Arabia, is pushing for the group and its partners to reduce output by 1 million barrels per day (MMbbl/d) to 1.4 MMbbl/d to prevent a buildup of unused fuel.
Oil rose for a fourth session in a row on Nov. 19, buoyed by the prospect that Saudi Arabia will push OPEC and maybe Russia to cut supply towards the end of this year.
Russian Energy Minister Alexander Novak said on Nov. 19 that Russia, which is not an OPEC member, planned to sign a partnership agreement with the group, and that details would be discussed at OPEC’s Dec. 6 meeting in Vienna.
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