‘Top oil producers committed to supply cuts until year end’
abu dhabi — All Opec and nonOpec oil producers including Russia are committed to supply cuts until the end of the year, said Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry, on Monday.
“All in all, the fundamentals of the market, the supply and demand, the job is not complete. We need to continue until we see a true balanced market,” he said, speaking on the sidelines of the Middle East Petroleum and Gas Conference in Abu Dhabi.
Oil eased on Monday on rising US borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish.
Brent crude futures were down 80 cents at $73.26 by 1351 GMT, while US West Texas Intermediate (WTI) crude futures fell by $1.20 to $67.20.
“Underlying sentiment is bullish ... we’ve got an important decision from (US President Donald) Trump coming up in May and we have Opec potentially trying to ‘overtighten’ the market,” Saxo Bank senior manager Ole Hansen said.
“(Fund managers) need a continuous flow of bullish news for their position to be maintained and this week, it’s not a matter of just watching the oil market,” Hansen added.
Broader financial markets were under pressure from the rise in US government yields towards 3 per cent, a level that in the past has triggered aggressive sell-offs in stocks, bonds and commodities.
“Whether a break above 3 per cent will have an impact on currencies remains to be seen, but to have an overall rising cost of finance at a time when Saudi Arabia is aiming at $100, something is going to give. Last time we were at $100 interest rates were rock-bottom and that wasn’t a concern to anyone. This time around, it’s a different story,” Hansen said. —
All in all, the fundamentals of the market, the supply and demand, the job is not complete. We need to continue until we see a true balanced market Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry