Oil pro­duc­ers to ex­tend cuts to re­bal­ance mar­ket

Kuwait Times - - Front Page -

ABU DHABI: Oil pro­duc­ers are ex­pected to unan­i­mously ex­tend a pro­duc­tion cut ac­cord later this month but its du­ra­tion is still un­der dis­cus­sion, the UAE en­ergy min­is­ter said yes­ter­day. “I think this group of com­mit­ted and re­spon­si­ble pro­duc­ers came to­gether... and I think they will con­tinue to do what it takes to take us to the next level,” United Arab Emi­rates En­ergy Min­is­ter Suheil Al-Mazrouei told the ADIPEC in­ter­na­tional oil con­fer­ence in Abu Dhabi. He said 158 mil­lion bar­rels of sur­plus crude oil re­main on the mar­ket and “we need to re­duce that - which means there is a po­ten­tial for ex­ten­sion”.

Mazrouei said there was near-una­nim­ity among the 24 OPEC and non-OPEC pro­duc­ers which agreed a year ago to cut out­put by 1.8 mil­lion bar­rels per day. The min­is­ter said that he had “not heard any­one” talk about al­low­ing the cuts deal to ex­pire, al­though the du­ra­tion of the new ex­ten­sion would be “sub­ject to dis­cus­sion”. “I am hope­ful that we will reach an agree­ment that will lead to more sta­bi­liza­tion in the mar­ket and more in­vest­ments com­ing to the mar­ket,” he said.

Mazrouei said an es­ca­lat­ing dis­pute be­tween re­gional pow­ers and OPEC mem­bers Saudi Ara­bia and Iran will not pre­vent a new ex­ten­sion. As a re­sult of the cuts, oil prices have re­bounded to more than $64 a bar­rel from $40 a year ago, and huge stocks of crude built up over the past three years have re­duced.

Mazrouei, whose gov­ern­ment is OPEC’s fourth largest oil pro­ducer, said he was not happy with the sharp fluc­tu­a­tions in prices, say­ing they need to be more sta­ble. OPEC min­is­ters are sched­uled to hold a cru­cial meet­ing in Vienna at the end of Novem­ber to dis­cuss ex­tend­ing the cuts deal as well as im­pos­ing the quota sys­tem on coun­tries that have so far been ex­empted, namely Libya, Iran and Nige­ria. Car­tel king­pin Saudi Ara­bia and the world’s top pro­ducer Rus­sia have voiced sup­port for a rollover to the deal, the du­ra­tion of which re­mains up for de­bate.

OPEC Sec­re­tary Gen­eral Mohammed Barkindo said the pro­duc­ers deal had yielded solid re­sults as a “valid re­sponse to the worst oil price down cy­cle in his­tory”. “There are clear in­di­ca­tions that the mar­ket is re­bal­anc­ing at an ac­cel­er­at­ing pace,” he said at the con­fer­ence. Barkindo said the oil mar­ket was on track to sta­bi­lize be­cause of a drop in crude stocks and a rise in global de­mand.

The OPEC chief also called on new oil pro­duc­ers, in­clud­ing US shale crude pro­duc­ers, to join a broader agree­ment to se­cure the fu­ture of en­ergy. Barkindo said talks were un­der way to “in­sti­tu­tion­al­ize” the co­op­er­a­tion be­tween OPEC and non-OPEC mem­bers to reg­u­late the mar­ket. “Now, we are not talk­ing about OPEC 14 but about the global plat­form 24,” he said, re­fer­ring to the num­ber of oil-pro­duc­ing mem­bers that signed the pro­duc­tion cut ac­cord. — AFP


ABU DHABI: UAE En­ergy Min­is­ter Suhail Al-Mazrouei, speaks dur­ing the ADIPEC event yes­ter­day.

Sec­re­tary Gen­eral of OPEC, Nige­rian Mohammed Barkindo, speaks dur­ing the ADIPEC event. — AFP

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