NEW DELHI: Saudi Arabia’s energy minister said on Wednesday that the world’s biggest exporter of oil will not sit by and let another supply glut surface, but also does not want oil prices to rise to “unreasonable levels.”
Members of the Organization of the Petroleum Exporting Countries (OPEC) are seeking a close balance between supply and demand, Khalid Al-Falih said, speaking on the sidelines of the International Energy Forum, a gathering of oil producers and consumers in New Delhi. Falih also told reporters he was happy with the current state of the oil market.
OPEC, Russia and several other non-OPEC producers began to cut supply in January 2017 in an effort to erase a global glut of crude that had built up since 2014. They have extended the pact until the end of 2018.
“I think a lot of the glut has been cleared,” said Falih. Asked if he was happy with the current market, he replied, “Yes, I am.”
Brent crude was trading above $70 a barrel on Wednesday, though easing away from the 2014 highs it matched in the previous session, as escalating Middle East tensions were offset by increasing inventories and production in the United States.
OPEC and its partners meet to decide oil policy in June and next week a ministerial panel gathers to review the market. The remarks from Falih suggest big changes in the supply cut agreement look unlikely for now.
Asked if India, a major consumer, would be happy with oil at $80 a barrel, Falih said no specific price was aimed for, and he was concerned about declining output in some producing countries and a lack of investment in new supplies.
“There is no such thing as a target price by Saudi Arabia,” he said. “We’re seeing many regions declining. The only way to offset this is for the financial markets to start financing and funding upstream projects.”
“I don’t know what is the price that will provide that equilibrium. All we know is in 2018 we’re still not seeing that.”
Saudi Arabia will not let another oil supply glut form, energy minister Khalid Al-Falih says
Saudi Arabia will not let another oil supply glut form, energy minister Khalid Al-Falih says
Closing Bell: Saudi stocks slip as Tadawul falls 1% amid broad market weakness
RIYADH: Saudi stocks fell sharply on Tuesday, with the Tadawul All Share Index closing down 108.14 points, or 1.03 percent, at 10,381.51.
The broader decline was reflected across major indices. The MSCI Tadawul 30 Index slipped 0.78 percent to 1,378.00, while Nomu, the parallel market index, fell 1 percent to 23,040.79.
Market breadth was strongly negative on the main board, with 237 stocks falling compared to just 24 gainers. Trading activity remained robust, with 164.7 million shares changing hands and a total traded value of SR3.19 billion ($850.6 million).
Among the gainers, SEDCO Capital REIT Fund led, rising 2.73 percent to SR6.77, followed by Chubb Arabia Cooperative Insurance Co., which gained 2.69 percent to SR20.20.
National Medical Care Co. added 1.72 percent to close at SR141.60, while Alyamamah Steel Industries Co. and Thimar Advertising, Public Relations and Marketing Co. advanced 1.57 percent and 1.13 percent, respectively.
Losses were led by Al Masar Al Shamil Education Co., which tumbled 8.36 percent to SR24.65. Raoom Trading Co.fell 6.75 percent to SR64.20, while Alkhaleej Training and Education Co. dropped 6.60 percent to SR18.12 and Naqi Water Co. declined 5.51 percent to SR54.00. Gulf General Cooperative Insurance Co. closed 5.44 percent lower at SR3.65.
On the announcement front, Chubb Arabia Cooperative Insurance Co. signed a multiyear insurance agreement with Saudi Electricity Co. to provide various coverages, expected to positively impact its financial results over the 2025–2026 period. The deal will run for three years and two months and is within the company’s normal course of business.
Meanwhile, Bupa Arabia for Cooperative Insurance Co. announced a one-year health insurance contract with Saudi National Bank, valued at SR330.2 million, covering the bank’s employees and their families from January 2026. Despite the sizable contract, Bupa Arabia shares fell 0.8 percent to close at SR137, weighed down by the broader market weakness.
In contrast, United Cooperative Assurance Co. revealed an extension of its engineering insurance agreement with Saudi Binladin Group for the Grand Mosque expansion in Makkah. The contract value exceeds 20 percent of the company’s gross written premiums based on its latest audited financials and is expected to support results through 2026. However, the stock came under selling pressure, ending the session down 4.51 percent at SR3.39.
