Abu Dhabi: The UAE on Sunday said that it will continue to cut production in line with the Opec and non-Opec agreement to help markets rebalance.
“We will continue to deliver on the Opec & non-Opec commitment for voluntary production adjustments, until the global market is rebalanced,” UAE energy minister Suhail Al Mazroui said on Twitter.
He also said that the UAE compliance for February will meet the obligations of the deal.
“In line with the Opec & non-Opec agreement, UAE compliance for the month of February 2019 will meet, if not exceed, it’s obligations. This will help to bring balance and stability to the global oil market,”
Members of Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members like Russia reached an agreement in early December last year to cut production by 1.2 million barrels per day to rebalance oil markets and support oil prices.
As per the deal, Opec is reducing output by 800,000 barrels per day and non-Opec members by 400,000 barrels per day.
The deal which came into effect from January 1, helped oil prices move up towards $65 per barrel from about $50 barrels per day in late December. Brent was trading at $65.74 per barrel when markets closed on Friday with WTI at $56.07 per barrel.
“We are expecting softer prices in the near term. In late 2018 oil prices overreacted to the downward revisions to growth and the volatility in the stock market, and what we saw in early 2019 can be seen as a process of normalisation,” said Francisco Quintana, head of strategy at Foresight Advisors.
“In the next quarter, we expect a mild decline in prices towards the $60 per barrel level, driven by weakening demand, particularly in China. However, the downside is limited given that Opec is showing a remarkable discipline in keeping its commitment and the collapse of Venezuela will keep market tight.”