Bouterfa: “We’ll come out with decisions… banking on Saudi Arabian/ Iranian mutual understanding”

Algerian Energy Minister on Sunday expressed optimism that an agreement could be reached by major oil producing countries to stabilize the world oil market.

“I’m very optimistic that OPEC members would reach a consensual agreement to restore stability to the up-and-down oil market,” Algerian Energy Minister Noureddine Bouterfa told a press conference preceding the informal meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers.

The informal meeting of OPEC will be held on the sidelines of the International Energy Forum in Algiers from Sept. 26-28. Mr Bouterfa affirmed that the upcoming informal Opec meeting could be turned into a formal one, if need be, at the request of member-countries through a consensual proposal to the General Secretariat of the organization.

The OPEC members pump up 33.4 million barrels per day, which is a very high level that could never help pushing prices to hike, according to the Algerian official.

Bouterfa urged both the OPEC and non-OPEC members to freeze production in a bid to stabilize the market.

He noted that oil price at 50 or 60 U.S. dollars would be favorable for both consumers and producers, as it would help producers to maintain investments and exploration of new fields, and therefore assure the availability of this key energy product in the long term.

He further noted that Saudi Arabia and Iran, the two influential members of OPEC, have been sending positive signals as they are likely to work on limiting their outputs in the short term, adding that talks are also underway with non-OPEC producers including Russia, to persuade them to freeze production.

The oil market is in a “much more critical” state than when the Organization of Petroleum Exporting Countries last met three months ago, and its members must seek ways to shore up crude, possibly by freezing or trimming production, Mr Noureddine Bouterfa underscored.

Aside from the Saudi Arabia, producers have made additional proposals, he said later at a news conference, without giving details.

“Saudi Arabia is ready to freeze production at the January level,” Boutarfa said, calling the offer “an interesting step.” Saudi Arabia pumped a record 10.69mn bpd in August compared with 10.2mn in January, data compiled by Bloomberg show. Fellow Opec member Algeria wants the group to cut its collective output by 1mn bpd, Mr Bouterfa said.

Crude prices, which have dropped more than half from their 2014 peak amid a global supply glut, rebounded last month on speculation that Opec and Russia might revive a pact to limit production. Prices have since cooled, and benchmark Brent crude futures fell 3.7% to $45.89 a barrel on Friday. A reasonable price for Algeria would be a range of $50 to $60 a barrel, Mr Bouterfa added.