BREAKING NEWS Five new Covid-19 cases reported in Shasta County Saturday Full Story

Saudi Arabia: We can 'easily' cut oil supply further if global economy stalls

Saudi Arabia's energy minister says that OPEC and its allies are prepared to quickly respond to a global eco...

Posted: Jan 14, 2019 12:11 PM
Updated: Jan 14, 2019 12:11 PM

Saudi Arabia's energy minister says that OPEC and its allies are prepared to quickly respond to a global economic slowdown.

Khalid Al Falih told CNN Business' Emerging Markets Editor John Defterios that while he doesn't "see a big economic recession," corrective actions are "easily within our control."

Business and industry sectors

Business, economy and trade

Continents and regions

Economic conditions

Economic decline

Economy and economic indicators

Energy and utilities

Middle East

Middle East and North Africa

Oil and gas industry

Recession

Saudi Arabia

Banking, finance and investments

Commodity markets

Energy commodities

Financial markets and investing

Oil prices

Financing and stock offering

Securities trading

Stock markets

Economic indicators

Energy and resources

Energy economic indicators

Government organizations - Intl

OPEC

Globalization

Trade and development

"If we see a slowdown ... it's going to be a small slowdown that oil markets can well absorb with adjustments to supply," Al Falih said during an interview Monday.

Oil prices have trended higher since OPEC and partners including Russia agreed in December to slash production. Opposed by the Trump administration, the deal called for the removal of 1.2 million barrels a day from world markets starting this month.

The agreement has helped support prices despite new evidence of weakness in major economies including China and Germany.

Al Falih said the group stands ready to cut production even more deeply if needed.

"[We are] meeting regularly, we are monitoring markets, and if we need to do more than the 1.2 [million barrels a day], we certainly will get together and do it," he said.

US crude oil futures have rallied in recent weeks to trade above $51 per barrel. Brent crude, the global benchmark, is hovering around $60. Saudi Arabia would welcome further price hikes.

The country is relying on oil revenue to fund an economic overhaul and support growth. Its economy contracted in 2017, but was expected to grow 2.2% in 2018 and 2.4% this year, according to the International Monetary Fund.

Higher prices would also help clear the way for an initial public offering for state-owned Saudi oil company Aramco, part of the country's plan to diversify its economy away from oil.

The IPO was initially planned for 2018 but later stalled. Al Falih said that a sale in 2021, however, is "very much doable."

"We will do what's right for the kingdom ... what's right for the new shareholders by making sure that the value is clear to the market and the market is ready to absorb such a large IPO," he said.

Saudi Arabia recently opened up its vast energy reserves to independent auditors for the first time, a move that could build investor confidence ahead of a share sale.

US energy consultancy DeGolyer & MacNaughton has concluded that Saudi oil reserves total 268.5 billion barrels, the government said last week. The estimate is slightly higher than the 266.3 billion barrel figure previously published by the government.

A lack of transparency over the size of the country's energy reserves had caused skepticism about the potential sale and the value of Aramco.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 318761

Reported Deaths: 7027
CountyConfirmedDeaths
Los Angeles1303943795
Riverside24765537
Orange23901421
San Diego19371422
San Bernardino18912304
Fresno790687
Imperial7827135
Alameda7725148
Kern633997
San Joaquin627968
Santa Clara5983166
Tulare5678152
Sacramento533981
Stanislaus463351
Contra Costa460589
San Francisco442650
Ventura424653
San Mateo3949112
Santa Barbara393131
Marin343430
Kings289839
Monterey254018
Solano207528
Merced188412
Sonoma165014
Placer105511
San Luis Obispo9054
Madera8938
Yolo83928
Santa Cruz5683
Napa4774
Sutter3724
Butte3384
San Benito3362
El Dorado3070
Lassen2750
Shasta1876
Yuba1803
Humboldt1654
Glenn1640
Nevada1631
Colusa1130
Mendocino1130
Lake1081
Tehama1041
Calaveras670
Tuolumne640
Del Norte600
Mono501
Siskiyou410
Amador400
Inyo341
Mariposa311
Plumas170
Alpine20
Trinity20
Sierra10
Unassigned00
Chico
Clear
95° wxIcon
Hi: 104° Lo: 68°
Feels Like: 95°
Oroville
Clear
95° wxIcon
Hi: 105° Lo: 67°
Feels Like: 95°
Paradise
Clear
95° wxIcon
Hi: 96° Lo: 69°
Feels Like: 95°
Chester
Clear
87° wxIcon
Hi: 86° Lo: 57°
Feels Like: 87°
Red Bluff
Clear
99° wxIcon
Hi: 105° Lo: 71°
Feels Like: 99°
Willows
Clear
95° wxIcon
Hi: 107° Lo: 65°
Feels Like: 95°
There is a Red Flag Warning in Modoc county today and tomorrow with temperatures getting as hot as 110 degrees for some in the Valley by Wednesday.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events