Saudi Energy Minister Khalid al-Falih said on Tuesday (January 15th) he was "very optimistic" about the outlook for the oil market after producers cut output to support flagging prices, AFP reported.
Members of the OPEC cartel and allies decided last month to reduce output by 1.2 million barrels per day (bpd) after prices fell by more than 40% in just a few weeks in late 2018.
The price of benchmark Brent crude, which briefly dipped below $50 a barrel in December, rebounded partially to above $60 a barrel following the production cuts which took effect on January 1st.
The market has remained volatile with prices fluctuating sharply even after OPEC kingpin Saudi Arabia announced last week it will gradually cut output by 800,000 bpd in January and a further 100,000 bpd next month.
"I am confident that the impact of the decision we took to cut output by 1.2 million bpd ... will be very strong," al-Falih told reporters on the sidelines of the Abu Dhabi Sustainability Week conference.
"But there is always a lagtime between the (decision to) cut production and the impact reaching the market," he said.
He said he is confident that "within the next few weeks" the market conditions will return to normal and confidence will be restored.
"I am very optimistic," al-Falih said.
The Saudi minister also downplayed the impact of an expected global economic slowdown on the oil market.
"I am not ruling out a cyclical recession. I think we all know that these things are a fact of life," especially after a long expansionary period, he said.
"I just do not see it as a major shock to the global economy. Certainly, I do not see a big spillover into the oil market," he said.