UAE says production cut extension needed
Dubai, 30 October (Argus) — UAE energy minister Suhail al-Mazrouei has added his voice to calls for crude production cuts to be prolonged.
"There is a requirement for an extension," al-Mazrouei said today.
Al-Mazrouei confirmed support of Saudi Arabia's readiness to back an extension of the production cut agreement, voiced by the Kingdom's crown prince Mohammed bin Salman on 28 October.
Momentum is growing for an extension to the agreement, ahead of a meeting of Opec and participating non-Opec ministers at the end of next month.
Earlier this month, Opec secretary-general Mohammed Barkindo said extra steps might need to be taken to cut crude output in order to consolidate market rebalancing. In September, Iraq's oil minister Jabbar al-Luaibi indicated support for further cuts, either in extension or depth.
Al-Mazrouei repeated his optimism that a deal could be reached at the November meeting, but said "we need to wait until the meeting happens" to talk on behalf of the whole organization.
The meeting is likely to be the earliest point at which a decision on production cuts will be taken. Some members will be keen to extend the cuts sooner, to improve market clarity and capitalize on progress made to date.
Others, such as major non-Opec producer Russia, have indicated willingness to extend cuts and a preference to make a decision closer to the deal's expiration in March.
Opec and 10 non-Opec countries have pledged to cut their collective output by around 1.7mn b/d to help speed up the rebalancing of global oil supply and demand, and in turn, give support to oil prices.
Overall Opec and non-Opec compliance with the agreement rose to a record high of 120pc in September, according to the Joint Ministerial Monitoring Committee (JMMC), charged with overseeing adherence to the agreement.
The UAE produced 2.88mn b/d in September, representing 96pc compliance with its targeted cut.