Wednesday, 18 July, 2018

OPEC, allies job is not done yet - Mr al-Mazroui

Crude Oil Price Sees Weekly Gain on OPEC Persistence Weak US Dollar OPEC, allies job is not done yet - Mr al-Mazroui
Nellie Chapman | 22 February, 2018, 17:17

Both crude benchmarks continue to derive support from increased expectations of a tighter market this year, as the OPEC output cuts deal extends its positive impact on the oil markets.

The collapse in global oil prices between June 2014 and January 2016 led to almost $1 trillion in investment being frozen or discontinued with "many hundreds of thousands of jobs" being lost throughout the industry, according to UAE Minister of Energy and Industry, Suhail bin Mohammed Faraj Faris Al Mazrouei.

Mazroui said he expects the UAE to exceed its oil production cut target in the first quarter of this year, mainly due to maintenance.

Mr Mazroui, who holds OPEC's presidency this year, said that the group's secretariat will be meeting with USA shale oil producers during the CERAWeek conference next month "to compare notes".

With the oil market being out of balance, "there was a necessity for action to alleviate this imbalance", he said.

Chris Midgley, head of the Analytics Content Division at S&P Global Platts, said that the demand on natural gas will come from three new markets in the coming years: China, India and Saudi Arabia.

West Texas Intermediate, WTI, oil futures on NYMEX, extends its upward correction into a fifth day, with thin markets fuelling the gains while ongoing supply reductions from Canada to the U.S. due to pipeline reductions also remain supportive of the USA oil.

The official comments from both Saudi Arabia and Russian Federation are that it's too early for an exit strategy, except the common-sense assumption that the exit should be gradual to avoid an oil price slump.

"I think we are seeing more cooperation, and my hope is that this group of OPEC and non-OPEC will incentivize the adequate investments among themselves to ensure we have adequate supply in the market", he said. Mazroui has said "the name isn't important".

There are also roughly a dozen other non-OPEC nations that have pledged to cut 600,000 additional barrels per day, with Russian Federation making half of these additional reductions.