Oil Market Shrugs As Saudi Arabia Digs Deeper to Rescue Falling Prices

Saudi Arabia’s efforts to shore up global oil prices ahead of the planned listing of Saudi Aramco was met with a shrug from the markets as traders kept their eyes on US shale.

The world’s largest oil producer pledged to cut deeper into its export volumes and take a tougher stance against countries which fail to stick to their agreed targets.

Saudi energy minister Khalid al Falih also told the meeting of the Opec and non-Opec producers in St Petersburg that it would push for the group’s co-ordinated oil supply cap to be extended through the start of next year if the current deal is not enough to drain the glut of global oil supplies.

Despite the fresh resolve to shore up oil prices, the market reaction was limited to a modest 1pc rise to just over $48.50 a barrel, after Nigeria said it has no plans to boost its rising production beyond the cartel’s agreed cap.

But the oil price is still well below the $50 price earlier this month and highs of around $56 earlier this year due to concern over rising US shale production which is not governed by the joint Opec and non-Opec deal.

Erik Norland, an economist at CME markets said the price reaction was “not an especially big move by the standards of the oil market”.

“The market’s muted reaction stems from the fact that today’s developments leave the existing agreement little changed with production still rising in Opec members Libya and Nigeria, as well as in non-Opec nations such as Canada and the United States,” he said.