$60 oil ‘not unthinkable’ by year end, says Falih

Istanbul — Saudi Arabia said on Monday it was “not unthinkable” that the price of crude oil could surge to $60 a barrel by the end of the year but warned against drastic production cuts that might shock markets. Speaking in the opening keynote speech at the World Energy Congress in Istanbul, Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih said that whatever the oil price the Kingdom was in good shape to implement its reform vision to transform the structure of its crude-based economy by 2030. “We are seeing the convergence of supply and demand,” said Al-Falih. “It is not unthinkable we could see $60 (a barrel) by the year end. “But my eyes are not on the price but on supply and demand.” He added: “OPEC should make sure not to crimp too tightly and create a shock to the market. “We do not want to shock the markets into a process that could be harmful.” The minister admitted that the Kingdom had become “a little fat around the belly, a bit complacent” during the era of high oil prices but was now fully committed to its economic reform program set out by Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense. “The Kingdom will be prepared to deal with whatever price emerges,” he said. The minister said he believed that demand for oil would peak but “if it does happen we will be ready for it.” “The (2030) vision will lead to a stronger and more robust Saudi Arabia,” he said, noting this includes the planned IPO of a portion of state oil giant Saudi Aramco, the biggest such offering in history. World Energy Congress in Istanbul brings together players across the energy sector to discuss a transformation of the sector.