* Expects producer action to help market improve further
* More clarity needed on production in Libya, Nigeria
* Says non-OPEC willing to not only freeze but cut output
(Adds quotes, details)
By Ron Bousso and Karolin Schaps
LONDON, Oct 19 Saudi Arabia's energy minister
gave an upbeat message to an audience of industry executives on
Wednesday, saying the oil market was at the end of a downturn
and producer action to limit supply would help it improve
Khalid al-Falih also told the annual Oil and Money
conference in London that non-OPEC countries were showing a
willingness to freeze and even cut supplies alongside the
Organization of the Petroleum Exporting Countries.
"Market forces are clearly working after a testing period of
sub-$30 prices. The fundamentals are improving and the market is
clearly balancing the supply and demand equation," Falih said.
"With this contribution of improving fundamentals,
rebalancing and the joint action by OPEC and non-OPEC alike, I
fully expect market conditions to continue improving."
Oil is trading near $52 a barrel, less than half its
level in mid-2014 when prices began to slide due to oversupply.
The downturn deepened after OPEC in November 2014 dropped its
traditional role of cutting its supply to support prices.
Appointed as energy minister for the top OPEC oil producer
and world's biggest exporter earlier this year, Falih has
overseen a return by the group to managing supply.
OPEC agreed in Algiers on Sept. 28 to reduce production to a
range of 32.50 million to 33.0 million barrels per day, which
would be its first output cut since 2008. Another meeting on
Nov. 30 is set to firm up details of the accord.
Falih said that by freezing production or slightly reducing
it, OPEC wanted to signal to the market that it wanted to lower
inventories and encourage investment. Spending has fallen due to
the price drop, raising concern about supply in the medium term.
"I am happy to see more rigs coming back," he said, adding
that unconventional oil production was important for helping to
meet global demand growth.
A challenge for OPEC is to work out how to manage the
aspiration of members whose output has been cut involuntarily to
pump more. Output levels are not known in some countries that
have disruptions, Libya, Nigeria and Venezuela, Falih said.
"We want some clarity on where those producers are as we
approach the meeting in November," he said.
OPEC wants non-member producers such as Russia to contribute
to the supply limiting effort and Falih was optimistic that they
"Non-OPEC is showing willingness to join, I won't mention
names, to not only freeze but cut production," he said. "Their
contribution to stabilisation could be as significant as those
made by OPEC members."
(Writing by Dmitri Zhdannikov and Alex Lawler; editing by Jason
Neely and David Evans)