Abu Dhabi: Global oil markets are on the right track and will soon return to balance due to implementation of production cuts by Opec and other countries, Saudi oil minister Khalid Al Falih said in Abu Dhabi on Sunday.

Opec and its allies including Russia are slashing production by 1.2 million barrels per day, starting from January 1, to rebalance oil markets and support prices.

Opec is cutting production by 800,000 barrels per day and non-Opec members by 400,000 barrels per day.

The minister however expressed concern about the recent volatility in oil prices.

“I remain convinced that we are on the right track and the oil markets will quickly return to balance. If we find that more needs to be done, we will do so in unison with our Opec and non-Opec partners,” Al Falih said at the Atlantic Council Global Energy Forum.

The cuts were necessitated by production levels in many countries and concerns pertaining to global oil demand.

Saudi Arabia and other countries have been decisive in reducing their output and expected other countries to follow suit, according to Al Falih.

“We have already done it, we have done enough, we have been decisive in our action, not only the kingdom but other countries too,” he said. “We have heard from the emirates and I have talked repeatedly to my colleagues in Iraq, they have already taken action.”

“Russia has started, slower than I’d like, but they have started. I am sure as they did in 2017, ultimately they will catch up and will be a positive contributor to rebalancing oil markets.”

Opec production in December was already more than 600,000 barrels per day lower than in November, the bulk of which was due to actions by Saudi Arabia, he added.

“We in Saudi Arabia, went beyond our commitment and have lowered production and export in the last two months. As the new 1.2 million barrels per day cut materialises, we should start to see the impact positively reflected on inventories, which is of course the key metric for all of us to watch.”

The comments came as the global benchmark Brent edged higher to trade at more than $60 (Dh220) per barrel on Sunday from around $50 per barrel two weeks ago. US crude West Texas Intermediate was at $51.59 per barrel.

Al Falih however expressed concern about the recent volatility and prevailing negative sentiment but said the present fundamentals are clearly trending in the right direction.

“Demand growth, we have to be reminded, remains healthy with forecasts not only for 2019 but beyond of 1.3 to 1.5 million barrels range while supply started to reflect already, two weeks into the new year, the impact of our decision to cut production by 1.2 million,” he said while ruling out the possibility of holding an extraordinary meeting of Opec+ countries.

On US shale oil, he said they welcome production from the US because it will help the world from facing the shortage of oil.

“We’ve seen the impact of oil prices rising from 40 to 50 dollars in 2016, 2017 to 80 to 90 a few months ago and how that created a lot of stress on developing economies.”

He also added a downturn in oil price is very hurtful and would kill investments in the US.

“This is the last thing we want to see. The action we’ve taken quickly in December and implementation of production cuts is a lifeline to US shale oil producers. We want a balanced, stable, less volatile market.”