Abu Dhabi: Mohammed bin Hamad Al Rumhy, Minister of Oil and Gas, said on Monday that he was confident there would be an agreement among global oil producers later this month to extend output cuts.
An extension would prolong the agreement among OPEC, Russia and other oil-producing nations to keep 1.8 million barrels a day off the market through the whole of next year.
In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November previous year. This latest move comes as investors expect figures to show U.S. oil production has risen. Additionally, the market has less supply overhang than it did a year ago, he said.
"Using a scenario whereby current levels of Opec [Organisation of the Petroleum Exporting Countries] production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 0.6m bpd followed by another, smaller, surplus of 0.2m bpd in 2Q18". Whatever Opec decides on future policy later this month, the UAE will be committed to it, he added.
Meanwhile, total shale output is estimated to rise by more than 80,000 barrels per day (bpd) to 6.17 million bpd, the US Energy Information Administration said today. It's a simple truth that the higher the price of Brent, the more irresistible the temptation for OPEC members to cheat on their production quotas. Russian Federation is responsible for more than half of the non-Opec restrictions. Supply was restored, however, as Saudi Aramco said on Monday that it fully resumed pumping crude oil to Bahrain. "This is mainly upstream, onshore, offshore and joint ventures in the Kingdom and out of the Kingdom". Compounding the situation, another eight managers and employees of state oil company PDVSA in eastern Venezuela were arrested in recent days for fiddling production figures, chief prosecutor Tarek Saab told reporters. It said that the world would need 33.42 million barrels per day of OPEC crude next year. He confirmed Adnoc planned to increase its refining capacity by 60 per cent in downstream.
Morse's remarks came just hours after Opec Secretary-General Mohammad Barkindo gave assurances in Abu Dhabi that the worldwide oil market is re-balancing at a quickening pace and production cuts are the "only viable option" to restore stability. "We are not going to meet in that quarter unless it is extraordinary", Mazroui said at an energy industry conference.