In Saudi Arabia, spoke about the long-term prospects of the agreement OPEC+

© AP Photo / Hasan JamaliДобыча oil in the middle East. Archival photoIn Saudi Arabia, spoke about the long-term prospects of the agreement OPEC+© AP Photo / Hasan Jamali

States oil producers can’t control the current prices for «black gold», however, the agreement of OPEC and other States on the reduction of oil production (OPEC+) will lead to long-term recovery of the world market, said Minister of energy, industry and mineral resources Saudi Arabia Khalid al-falih.

«I think the market is moving in the right direction. However, given the excessive volumes of oil in storage tanks that have accumulated over recent years for the onset of effect of the decline in production will take time,» said the Minister published on Monday an interview with the Saudi newspaper «Ash-shark al-Ausat».

Overall, he said, inventory levels in the storage tanks in different regions is reduced, but the market reacts to the stock level in the U.S., which is still falling slower than expected. And answering the question about the causes of the fall in oil prices is not, despite the agreement to cut production, he explained that the current price is made up of a number of factors, including those beyond the control of producer countries.

«Most of the fluctuations in the market in the short term are reactions to a number of factors, such as news headlines, which the media report, the forecasts for production from different sources, which in the end may not come true,» said al-falih. In addition, price fluctuations may influence the actions of speculators, said the Minister.

He also confirmed the «unprecedented», according to him, the level of compliance agreement to reduce oil production and called for the creation of a «permanent mechanisms» regulation of production by OPEC and independent producers. «It (the agreement — ed.) opens a new era of cooperation between major oil producers inside OPEC and outside the organization, which aims at balancing Rykov. We hope to develop permanent mechanisms in the future,» concluded the Saudi Minister.

OPEC and a number of not members of the organization countries agreed in late 2016 in Vienna on the reduction of its oil production to total 1.8 million barrels per day from October levels, of which 300 thousand are in Russia. The agreement was concluded for the first half of 2017 with possibility of extension. In may, its validity was extended for nine months until the end of March 2018.