Oil prices may rise even more once investors see that Opec and other major producers are fulfilling an agreement to cut production to curb the global glut, said the UAE Oil Minister Suhail Al Mazrouei.
Opec is committed to the decision to reduce output and it is too early to talk about any additional steps it may take, Mr Al Mazrouei said in Abu Dhabi. Eleven non-Opec countries said on December 10 that they would reduce output by 558,000 barrels a day, adding to a November 30 Opec pledge to cut 1.2 million bpd starting in January.
“When the market sees the agreement is being implemented, and we hope it will be an effective agreement that will be implemented, and when they see the reduced supply in the market, I am sure this will be positive” for prices, Mr Al Mazrouei said.
Oil has risen by 18 per cent since November 29. Output cuts that the organisation and other producers agreed to may reduce swollen inventories as early as the first quarter, bringing down the surplus by about one-third, Ed Morse, the head of commodity research at Citigroup, said last week. Opec has requested all members except those exempted from cuts to disclose export plans to ensure compliance with the agreement.
The UAE and other GCC nations have told their customers about plans to cut output, and all other Opec producers who were asked to join the output deal should do the same, Mr Al Mazrouei said.
“We call on all Opec members that promised to cut to follow the steps of the Gulf states and the UAE and advise the markets and buyers about the percentage of the cuts that they will make,” he said.
* Bloomberg
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