From left: UAE Minister of Energy Suhail Al-Mazroui, Opec Secretary General Mohammad Barkindo, Saudi Energy Minister Khalid Al Falih and Russian Energy Minister Alexander Novak attend a meeting of the Joint Ministerial Monitoring Committee in Abu Dhabi on Sunday. Image Credit: AFP

Abu Dhabi: Oil markets are well supplied and any decision regarding output cuts for 2019 will be taken at a crucial meeting in Vienna next month, ministers from Opec and non-Opec members said in Abu Dhabi on Sunday.

Saudi Arabia’s Energy minister Khalid Al Falih said oil markets are adequately supplied and they will work hard to balance the markets. He also added that they will never guarantee a certain price.

“There will be fluctuations in oil prices and inventories,” Al Falih told reporters at the Joint Ministerial Monitoring Committee meeting in Abu Dhabi.

Ideally we don’t like to cut, we like to keep the market liberally supplied and comfortable. We will only cut if we see a persistent glut emerging and quite frankly we are seeing some signs of this coming out of the US. We have not seen the signs globally.

- Khalid Al Falih | Saudi Arabia’s Energy Minister

“We have not yet started discussions of cuts as yet. There is a possibility for cuts but we have to wait and see.”

He further said that they will not shy away from cutting if there is a need and oil market sentiment has clearly shifted to concerns about over supply.

$85

Average oil price per barrel in October

“Ideally we don’t like to cut, we like to keep the market liberally supplied and comfortable. We will only cut if we see a persistent glut emerging and quite frankly we are seeing some signs of this coming out of the US. We have not seen the signs globally.”

UAE Oil Minister Suhail Al Mazroui said “as a group we will not advise any member state to produce when the market does not need.” He also hoped that Opec and non-Opec members will continue to together till 2019 and beyond.

“We have managed to achieve five year average inventory levels this year. We worked together at a difficult time.”

Oman oil minister Mohammad Al Rumhi said they will go with the consensus and are against an oil price of over $100 (Dh367) per barrel because it would affect consumers.

As a group we will not advise any member state to produce when the market does not need.

- Suhail Al Mazroui | UAE Minister of Energy

Al Rumhy also said they are pleased that there have been waivers for Iran. “What is good for Iran is good for the world.”

The comments from the oil ministers come as oil prices currently trade lower due to record oil production from the US as we as waivers granted to eight countries that import oil form Iran including China, India, Japan and Turkey among others.

Balancing market

US reimposed sanctions on Iran last week over its controversial nuclear enrichment programme and asked countries to stop buying oil from Iran.

Brent, the global benchmark was trading at around $70 per barrel and West Texas Intermediate at about $60 per barrel on Sunday.

10.9m

Expected US crude output (in bpd) this year

Oil prices plunged from more $85 per barrel on October as supply concerns due to US sanctions waivers as well as growing production from the US and other countries.

According to US-based Energy Information Administration (EIA), average prices for Brent expected to be $72 in 2019 and for West Texas Intermediate it would be $65 per barrel.

EIA also expects US crude oil production rising to 10.9 million barrels per day I 2018, up from 9.4 million barrels per day in 2017, and will average 12.1 million barrels per day in 2019.

Earlier in the day, Saudi Arabia’s oil minister Al Falih did not give a specific answer when asked by reporters whether oil market is in balance. “We will find out. We have a meeting later in the day,” he told reporters.

Al Falih also held discussions with Iraqi officials on the need to coordinate jointly to bring stability to oil markets, during a meeting in Baghdad on Saturday.