Saudi energy minister says oil market fundamentals improving

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Saudi Energy Minister Khalid al-Falih said on Tuesday that oil market fundamentals were improving after an agreement struck with top oil producers to curb supply and end a two-year glut took effect.The kingdom led a pact between the Organization of the Petroleum Exporting Countries and other major producers, including Russia, Mexico and Kazakhstan, to cut global crude output by about 1.8 million barrels per day (bpd) from Jan. 1, and bring supply closer to demand.

 

Saudi Arabia had cut beyond what it had pledged in the agreement and brought the kingdom's output below 10 million bpd, he said. Suppliers participating in the curbs have cut more than 1.5 million bpd, he said, exceeding what he called the market's low expectations.

 

Global oil demand would grow by 1.5 million bpd in 2017, and increased output from the United States, Brazil and Canada would be more than offset by natural declines in aging fields, he said.