The price of oil is set to record fresh highs for 2016 this week, despite comments from the Saudi Arabian oil minister that the de facto Organization of the Petroleum Exporting Countries (Opec) leader will not cut its production and stubbornly high reserves of oil in the US.
Saudi Arabia will maintain its oil market share and the idea that it would cut production, while other countries increase it is “not a realistic one,” Saudi Arabian foreign minister Adel al-Jubeir has said.
The oil price closed up on Friday. International benchmark Brent crude was trading at $38.93, while US West Texas Intermediate was going for $36.33.
Saudi Arabia has been leading attempts to broker a deal with Russia and other Opec members to freeze production, taken as a sign by the oil market that the kingdom is willing to intervene to prop up the oil price.
Russia has agreed to the deal, along with Venezuela and Qatar. Other Opec members have also signalled their interest in the deal and are due to meet in Russia on 20 March, according to Nigeria’s oil minister Emmanuel Kachikwu.
Iran has repeatedly poured scorn on the deal however, calling it “ridiculous” and “laughable” as it vows to continue to raise its own production.
Last week the oil price was sent sharply higher by comments from Russian President Vladimir Putin, promising Russian oil companies will not increase output this year.
US stockpiles showed last week that the low oil price has yet to impact inventories, climbing to highs not seen since April last year. Analysts expect production to begin to tail off in coming months.