Saudi Arabia’s energy minister has said that there is a chance of another production cut from Opec countries this year.
Speaking at the World Economic Forum at the Swiss ski resort of Davos, Khalid Al-Falih said he “would not exclude” another cut to follow last year’s December agreement if higher prices do not stick.
He noted that in the past the Opec oil cartel has often had to cut production more than once to stabilise the market.
Another option, he said, is that the recently agreed on production cut could be extended further.
However, he says oil ministers do not want to create a shortage too early.
Oil prices are trading at over 50 US dollars (£40) a barrel, nearly double the level they were a year ago.
Earlier on Thursday, the International Energy Agency said global oil output is dropping for the first time in months, as Saudi Arabia and other oil-producing countries follow through on pledged cuts aimed at lifting oil prices.
The IEA’s monthly report said that Opec production dropped to 33.09 million barrels a day in December from 34.2 million the previous month.
The first such drop in seven months, it is attributed to lower Saudi output and disruptions in Nigeria – though production from nations outside Opec also fell.
However, the IEA’s executive director, Fatih Birol, said the higher oil prices prompted by the production cut could see a rise in output from US shale gas producers.
Increased supply could one again weigh on oil prices.
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