Abu Dhabi: The UAE energy minister urged Opec (Organisation of the Petroleum Exporting Countries) members to inform their customers about their plans of cutting production in line with the decision taken at the Opec meeting in Vienna on November 30.
Opec members agreed last month to slash production by 1.2 million barrels per day in order to prop up oil prices.
“As you saw the GCC [Gulf Cooperation Council] companies announced to the consumers that they are about to reduce (production) and we call on all Opec members that committed to the cuts to take the same steps and inform markets and buyers about the reduction,” Suhail Al Mazroui told reporters in Abu Dhabi on the sidelines of a Ministry of Energy event on Thursday.
Asked whether the UAE is mulling further production cuts to support oil prices after Saudi Arabia signalled that it is ready to cut production more than expected, Mazrouei said it’s “too early to speak” about taking additional steps.
“We took a decision already and we are committed to that decision. We don’t want to jump ahead by talking about additional steps (cuts),” he said.
On the impact of the Opec decision on oil markets, he said the decision will be positive in creating correction in the markets.
“When the market sees that the deal is in effect and they see the impact it has on reducing the oil surplus, we expect this to be positive in creating correction in the market.”
Oil companies from the Gulf said last week that they are slashing supplies in a sign of compliance with the Opec agreement.
Abu Dhabi National Oil Company [Adnoc] has announced that it is planning to reduce crude supplies by 3 to 5 per cent from January, as reported by Reuters.
Saudi Arabia, Qatar and Kuwait have also announced cuts and plan to inform customers about their decision in the coming days. Other members who are part of the deal are yet to make announcements on their plans to cut production.
The decision to cut supplies comes after a historic meeting in Vienna where Opec members pledged to slash output for the first time in eight years.
Major oil producers from outside the group including Russia and Kazakhstan have also said they would reduce output by a total of 558,000 barrels per day.
Oil prices have surged to their highest level since mid-2015 to trade above $57 per barrel following the decision by oil producers to cut production from next month. However, there are still doubts whether Opec member countries would comply with the decision or not.
Brent, the global benchmark was trading at $54.11 on Thursday, down by about 0.64 per cent and the US crude West Texas Intermediate at $52.17 per barrel, down by 0.61 per cent at 3:45pm UAE time.
BOX — UAE expects oil prices to rise more on global production cuts
Abu Dhabi: Oil prices may rise even more once investors see that Opec and other major producers are fulfilling an agreement to cut production to curb the global glut, United Arab Emirates Oil Minister Suhail Al Mazroui said.
Opec is committed to the decision to reduce output and it’s too early to talk about any additional steps it may take, Al Mazrouei told reporters in Abu Dhabi. Eleven non-OPEC nations said Dec. 10 they will reduce output by 558,000 barrels a day, adding to a Nov. 30 Opec pledge to cut 1.2 million starting in January.
“When the market sees the agreement is being implemented, and we hope it will be an effective agreement that will be implemented, and when they see the reduced supply in the market, I am sure this will be positive” for prices, Al Mazroui said.
-Bloomberg
