VIENNA 28 May 2017: UAE Minister of Energy Suhail bin Mohammed Faraj Faris Al Mazrouei, said the agreement reached unanimously the Organisation of the Petroleum Exporting Countries (Opec) on Friday to extend the production cut by 1.8 million barrels per day until the first quarter of 2018, will help balance the market.
Al Mazrouei expressed his satisfaction at the resolutions of the 37th Opec ministerial meeting, and the second ministerial meeting of the countries participating in the reduction of Non-Opec oil production.
The UAE minister predicted that at least 200 million barrels of global stock would be reduced to achieve the members’ target of reaching the average levels of commercial stock for the previous five years.
He expressed his optimism about the gradual start of the oil investments at world markets after this agreement to achieve the harmonisation of future demand for oil.
Al Mazrouei noted the levels of global demand for oil this year look better than expected by the Organisation with 1.3 million barrels per day, and that the third quarter of this year will see a recovery in the demand for petroleum products as usual during the holidays, and increased demand for the use of transport.
He welcomed the accession of the Republic of Equatorial Guinea as a new member to the Opec, and a country supporting the production cut agreement.
Opec extends oil output cuts for nine months
Opec extended oil production cuts for nine more months Thursday during the organisation’s meeting in Vienna.
Members of the Organisation of Petroleum Exporting Countries agreed to prolong their accord through March 2018, keeping existing oil output at current levels.
The 172nd meeting was preceded with a consensus among the member states around an agreement that runs through additional months.
Monthly reports had indicated a noticeable improvement in crude rates after the organisation’s members and non-members have impressed the market with unprecedented levels of compliance since the cuts started in January this year under a deal that saw OPEC members committed to reducing production by around 1.2 million bpd while non-Opec producers voluntarily decided to reduce output by 600,000 bpd.
Thursday’s decision to continue to battle a global glut of crude comes in conformity with the recommendation made by the Joint Opec-Non-Opec Ministerial Monitoring Committee that the production adjustments of the participating countries be extended for nine months commencing 1 July 2017. In this regard, the JMMC should continue monitoring conformity levels as well as market conditions and immediate prospects, and recommend further adjustment actions, if deemed necessary.
By Rajive Singh