Oil producers to extend cuts to rebalance market: UAE

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 nearunanimity 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” talks 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 stabilisation 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 US $ 64 a barrel from US $ 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.