The UAE will be cutting oil production by more than 200,000 barrels per day this month as part of its commitment to Opec agreement, the country’s energy minister said in Abu Dhabi on Tuesday.
“This month it [production cut] is going to be close to 200,000 and also little bit more. Next month and the moth after, we are going to cut production by more than 139,000. Over all, for the six months, we are committed to the agreement,” Suhail Al Mazroui told reporters on the sidelines of the Global Manufacturing and Industrialisation Summit.
Thirteen members of the Organisation of the Petroleum Exporting Countries (Opec) and 11 non-Opec members agreed to cut production by about 1.8 million barrels a day to prop up oil prices in December last year.
Opec agreed to slash output by 1.2 million barrels a day where as non-Opec members led by Russia promised to cut 558,000 barrels a day.
The energy minister said the level of compliance among Opec member countries has been high in the first two months where as non-Opec members need to improve bit more.
“The agreement is working well and the current increase in inventories is due to maintenance in the US markets. We know that maintenance is going to be over and we will see drawdown in the inventories in the second half of this year.”
Asked whether he expects higher oil prices in the second half of the year, he said they are more concerned about balancing oil markets and attracting investments rather than oil price.
“I see improvement in the supply and demand which will lead to the price. However, we are not concerned about the price. We are concerned more about balancing the market and attracting investments. We are achieving as we move.”
Oil prices went up by more than 10 per cent following the deal in December but fell in the last two weeks due to increase in oil production in the US. Brent, the global benchmark is currently trading at around $51 (Dh18.36) per barrel.
“Everything is working very well. We look at the average price, not day-to-day price. We will have some fluctuation in oil prices and this is expected. Overall the situation is good.”