Abu Dhabi: Members of the Organisation of the Petroleum Exporting Countries (Opec) are close to reaching an agreement on extending production cuts, the UAE’s energy minister said on Tuesday.
Speaking at the International Economic Forum of the Americas, Suhail Mohammad Faraj Al Mazroui, Minister of Energy and Industry, said that given existing oil inventories the output curbs should remain in place or be extended “at least until the end of the year.”
The “right decision will be a rollover,” said Al Mazroui, noting he favours continuing the curbs.
Opec and producer allies including Russia last year agreed to cut their output beginning on January 1 to avoid a supply glut.
The agreement was to reduce supply by 1.2 million barrels per day (bpd) for six months using October production as a baseline.
Even as Opec and allies reduce output, US shale output has continued to rise and some analysts predict weaker economic growth will reduce oil demand. US shale producers this month will add 83,000 bpd, hitting 8.49 million bpd, the Energy Information Administration said last month.
“I think the demand for oil will remain solid in 2020,” Al Mazroui said in an interview on the sidelines of the economic forum.