Oil sector banks on early stability

UAE energy minister says Opec’s current market share is at a ‘good level’

The oil sector is resilient to counter challenges and may achieve stability soon, the UAE energy minister, Suhail Al Mazroui, said on Saturday. His comments came shortly after oil prices moved near the keenly watched $50 a barrel.

Oil prices rallied by about 20 per cent in August after Saudi Arabia’s energy minister, Khalid Al Falih’s comments that they are watching the market closely, and if there is a need to take any action to help the market rebalance, they would do in cooperation with Opec (Organisation of Petroleum Exporting Countries) and major non-Opec exporters.

“We acknowledge and understand the market challenges but in my view our sector is resilient to overcome it and achieve stability soon,” Al Mazroui said in comments posted on his official Twitter account on Saturday.

He also said that regardless of the different views on the oil market, Opec current market share is at a “good level”, adding that any future decision on oil production would require full participation of Opec member countries plus oil producers. Venezuela and Iran, too, continue to seek consensus on ways to stabilise oil markets and strengthen Opec.

Analysts, meanwhile, are sceptical about a deal happening at the next month’s informal Opec meet in Algeria.

“By the end of this year, supply-demand imbalance will start to correct itself, so hopefully, [in the] early part of 2017 prices might go higher,” said Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s Asset Management Group.