Saudi Arabia Pledges Commitment to Production Deal and is Optimistic on Results

Saudi Arabia will adhere strictly to its commitment to cut output under the global agreement among oil producers, its energy minister said on Monday, expressing confidence that OPEC’s plan to prop up prices would work.

Saudi Energy Minister Khalid al-Falih, speaking at an industry event in Abu Dhabi, also said he was encouraged by signs of commitments by other participants in the deal since it took effect on Jan. 1.

“Many countries are actually going the extra mile and cutting beyond what they’ve committed… I am confident about the impact… and I am very encouraged about those first two weeks,” Falih said.

The comments are the latest in a series of assurances from officials that participants will follow through on the agreement intended to help get rid of a glut. Compliance with the deal will be a key influence in early 2017 on oil prices LCOc1, which at $56 a barrel are about half their level of mid-2014.

Under the accord, the Organization of the Petroleum Exporting Countries and Russia and other non-members will curtail oil output by nearly 1.8 million bpd, initially for six months.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza