In an interview with Reuters, Saudi Arabia's Energy Minister, Khalid al-Falih, said on Saturday that OPEC will be responsive to the oil market's needs, but that he was not sure there is an oil shortage with data, particularly from the United States, still showing inventories building.
Speaking ahead of a ministerial panel (known as JMMC) gathering of top OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers, including Saudi Arabia and Russia, in Jeddah on Sunday, Falih told Reuters that the decision on output will not be decided until late June, when the group is due to meet bi-annually.
In their previous meet, held in December 2018, the member nations had agreed to reduce output by 1.2 million barrels per day (bpd) from 1 January for a period of six months. The deal was designed to stop inventories building up and weakening prices.
"We will be flexible. We are going to do the right thing as we always do," Falih said of any decision at the meeting in June on continuing the reductions.
Falih said OPEC is guided by two main principles: "One to keep the market in its direction towards balancing and inventories back to normal level. And two to be responsive to market needs. We will strike the right balance I am sure."
While OPEC agreed to make a cut of around 800,000 bpd, the actual reduction has been far larger due to the production losses in Iran and Venezuela, which have been imposed with US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
"I am not sure there is a supply shortage, but we will look at the (market) analysis. We will definitely be responsive and the market will be supplied," Falih told Reuters.
"All indications are that inventories are still rising. We saw the data from the US week after week, and they are massive increases, so obviously (there is) supply abundance," he added.