Recently appointed Saudi Energy Minister, Khalid Al-Falih, said that an amount of more than $50 per barrel is needed to sustain investments in the global oil sector, Reuters wrote. He added that the excess of huge stocks are imposing pressure on the prices.
Trade Arabia reported that Al-Falih told German business daily Handelsblatt: “We need a price higher than $50 to achieve a balance in oil markets in the long term, and just as $50 is too low to sustain investment, prices in excess of $100 are too much. The optimum lies somewhere in between.”
Even though the decline of oil output by roughly 1mb/d in countries like the US and Canada has brought the oil market to a re-balance, a long time is needed before it is fully accomplished, according to Al-Falih. He further said that “here are economic headwinds in some important markets and we hope this does not trigger a slowdown in global demand.”
World’s biggest crude exporter, however, has previously planned to boost crude production to 10.5mb/d in the next few months as higher summer temperatures increase demand for electricity needed to cool homes and offices. The country’s output was 10.26mb/d in April 2016 after reaching a record 10.56mb/d in June 2015.