Crude oil pricing dynamics have shifted in recent weeks due to global worries about supplies, Saudi Arabia’s oil minister told Arabian Business.
“Did you see what happened over the past three days? The market shifted from contango to backwardation, because people are expecting a shortage,” Ali al-Naimi, minister of Petroleum and Mineral Resources of Saudi Arabia, told reporters on the sidelines of an Organisation of Arab Petroleum Exporting Countries (OAPEC) meeting in Doha.
Saudi Arabia currently has no plans to cut production to accommodate increase supply by other OPEC countries, according to al-Naimi.
The Kingdom kept production steady at around 9.7m barrels per day (bpd) in October and November. Earlier this month, OPEC members agreed to adhere to a 30m-bpd target. But without individual country quotas, which were discarded by OPEC last year, the target cannot be properly policed.
According to Arabian Business, several OPEC members have called on Saudi Arabia to cut back its production to bring OPEC’s total supply down to the 30m- bpd threshold and defend a price of $100 a barrel for crude.
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