IEA: Fierce Global Refining Competition May Lead To Closures

Khalid al Falih speaks during a news conference in Riyadh

Saudi oil minister Khalid al-Falih said on Sunday it would be too early to change OPEC+ output policy at the group's meeting in April and that China and the United States would lead healthy global demand for oil this year.

Brent crude futures were at $66.17 per barrel, up $0.43, or 0.65%. "But, barring this, I think we will just be kicking the can forward", Mr Falih said.

The report comes as OPEC countries and allied major oil producers led by Russian Federation are trying to balance the oil market.

Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output "well below" 10 million bpd, the Saudi official said - below the 10.311 million bpd that the kingdom had agreed to pump.

The story that has been underpinning prices is the OPEC-led supply cuts that have been trimming about 1.2 million barrels per day since January 1.

Last December, OPEC members and their non-OPEC allies agreed to cut a total of 1.2 million barrels of crude oil from their supplies based on the October production levels. Six analysts polled by Reuters estimate they rose 2.9 million barrels.

"We will continue to deliver on the OPEC & Non-OPEC commitment for voluntary production adjustments until the global market is re-balanced", Minister of Energy and Industry Suhail al-Mazrouei said on Twitter.

The resolution was to be subject to a review to either extend the cut by June, or discontinue after the monitoring team has reviewed the impact.

Saudi Arabia's total gross exports are predicted to stand at 9.52 million barrels a day in 2024, while USA is rapidly closing the gap with the kingdom. "Aramco is finalizing their April allocations today or tomorrow so we will know more on Monday".

Pradhan also pointed to the need for uninterrupted supplies of crude oil and LPG (cooking gas) to India in view of the OPEC+ cuts.

On the other hand, production in United States hit a record of more than 12 million bpd in February.

The global refining industry faces a wave of new capacity additions to 2024 that would greatly exceed demand growth for refined products, and this may result in refinery closures to rebalance the market, the International Energy Agency (IEA) said in its Oil 2019 annual report on Monday.

India is seeking investment from Saudi Arabia to build emergency crude reserves that will act as a buffer against volatility in oil prices and supply disruptions for the third-largest oil consumer.

After the meeting, India's oil minister said he wanted Saudi Arabia to play an active role in keeping oil prices at a reasonable level as rising prices affect the Indian economy.

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