Azmin heads to Vienna as oil price falls below Budget 2019 estimate

Liow Sze Xian

Modified 3 Dec 2018, 9:39 am

Malaysia will seek the support of other small oil-producing countries at the Organisation of the Petroleum Exporting Countries (Opec) in a bid to stabilise petroleum prices.

Economic Affairs Minister Mohamed Azmin Ali, who will be attending the meeting, said although Malaysia was not an Opec member, Malaysia has informal obligations to the organisation.

"We were asked to cut production by 20,000 (barrels per day). That understanding expired in December.

"So we are going to discuss the matter further. (We want to know) whether we want to keep (to) that understanding or elevate that understanding to a more formal type of discussion.

"That will be discussed in Vienna," said Azmin, when met at the parliament lobby today.

In May last year, Malaysia has committed to cut oil production by 20,000 barrels per day along with Opec countries to stabilise global oil prices.

Azmin said this when asked whether Budget 2019 - which is estimated based on US$70 per barrel of crude oil - needed to be recalibrated in view of falling oil prices since October.

Crude oil fell below the US$50 per barrel mark late last month.

Azmin said he did not want to jump to conclusions on whether Budget 2019 will have to be recalibrated.

This year, the US became the world's largest oil producer, surpassing Saudi Arabia due to shale oil made possible by advancement in horizontal drilling.

This had caused downward pressure on the price of oil and diminished the influence of Opec, which in the past had a strong sway on oil prices.

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