OPEC deal not the only means to rebalance crude oil market, Saudi´s Al-Falih says

Oil prices bounced back at the beginning of the week amid multiple reports of last minute negotiations and shuttle diplomacy between high-ranking OPEC officials as its members to try and close the first deal in eight years to cut their combined level of output.

Highlighting the difficulty of reaching a deal, on Sunday Saudi Energy Minister Khalid Al-Falih floated the possibility that an output cut agreement was no longer necessary as a pick-up in US oil demand in 2017 would suffice to rebalance supply and demand in the market.

The announcement came amid foot-dragging from Saudi Arabia´s two main regional rivals, Iraq and Iran, on freezing or much less cutting their own levels of production.

Russia was also seen as simply paying 'lip-service' to talk of a production freeze.

“We expect demand to recover in 2017, then prices will stabilize, and this will happen without an intervention from OPEC,” Al-Falih said on 27 November, according to Saudi daily Asharq al-Awsat.

“We don’t have a single path which is to cut production at the OPEC meeting, we can also depend on recovery in consumption, especially from the US,” he said.

On the previous day, reports indicated that Algeria´s Energy Minister, Noureddine Boutarfa, had presented a proposal to Iran for a 1.1m barrel a day reduction in OPEC´s together with a 600,000 b/d cut by non-OPEC producers.

Boutarfa and his Venezuelan counterpart, Eulogio del Pino, were expected to travel to Moscow on Monday.

To take note of as well, on Monday afternoon Iraqi oil minister Jabar Ali al-Luaibi said he was optimistic that OPEC would be able to reach a deal when it met on Wednesday.