Abu Dhabi: Gulf energy ministers expressed confidence about the extension of the Opec agreement beyond March 2018 to rebalance oil markets.
Speaking at the Abu Dhabi International Petroleum Exhibition and Conference, UAE energy minister Suhail Al Mazroui said there is a potential for extension of Opec agreement beyond March 2018 but the period of extension is subject to discussion.
“I haven’t heard anyone talking about not [wanting] to extend the deal but the period of extension is subject to discussion. It will be a unanimous decision which requires everyone to agree. I am hopeful that we will reach an agreement that will lead to more stabilisation and investment in the industry,” Al Mazroui said.
He said there is still 158 million barrels of oil in storage which is above the five year average and needs to be reduced.
Opec countries will meet on November 30 in Vienna to take a decision on the extension of the output cut agreement reached between the members of the group and non-Opec countries last year.
Oil producing countries are cutting output by 1.8 million barrels a day to prop up oil prices and rebalance the market. Oil prices have gone up since the agreement came into effect earlier this year.
“What happened has been remarkable. We got 24 countries to do something about imbalance that has happened due to oversupply and historical increase in oil storage of above five year average,” he said about the output agreement.
Oman oil minister Mohammad Al Rumhy also expressed confidence about the extension of the agreement till the end of 2018.
“The agreement is valid till March and if there is an extension it could be till the end of 2018. I am hopeful of a decision at the next Opec meeting on November 30 about the extension,” he told reporters.
UAE energy minister also spoke about oil price fluctuation and said the trend is not healthy for consumers as well as producers.
“We need some stability in the market. I am not happy with the oil price going up from $40 per barrel to $60 per barrel this year. This kind of fluctuation is not good for the stability of the oil market,” Al Mazroui said.
He said increase in shale oil production is not of a big concern and the market needs shale oil due to growing demand.
“The demand is better. We need shale oil and deep water oil. The market will continue to improve.”
