Published: Tue, November 14, 2017
Business | By Max Garcia

Oil minister confident of deal to extend output cut this month

Oil minister confident of deal to extend output cut this month

Oman's oil minister, Mohammed bin Hamad al-Rumhi, said on Monday that he is confident there will be an agreement among global oil producers later this month to extend output cuts.

The level of inventories held by industrialized above the five-year average "has fallen by more than 50 percent in 2017, with inventories now at around 160 million barrels", consultancy Timera Energy said.

Crude oil prices were mixed in Asia on Tuesday with weekly industry estimates of US inventories ahead as well as monthly supply and demand figures from the Paris-based International Energy Agency.

"The recent price support, namely the tension in the Middle East, has been swept aside as rising rig counts and US shale output (are) in the focus of traders", PVM Oil Associates analyst Tamas Varga said.

Speaking at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), al-Mazroui said: "My prediction is OPEC will continue to do what it takes to rebalance the market", CNBC reported.

OPEC forecast higher demand for its oil in 2018 and said its production-cutting deal with rival producers was reducing excess oil in storage, pointing to an even tighter global market next year.

The exporters reached the deal last December and have already extended the agreement through March 2018.

The Sultanate's crude oil output stood at 235.33 million barrels in the first eight months of 2017, against 244.79 million barrels in the same period previous year.

UAE's energy minister said he saw no need for the decision to be delayed beyond the November 30 meeting in Vienna. The group is expected to agree an extension of the cuts beyond their current expiry date in March 2018.

Also, OPEC sees no reason for investors to expect oil to hit peak demand before 2040, the organization's secretary general said Monday.

So far in 2017, Brent has averaged at $54.5 per barrel.

However, the Brent oil price was steady at close to two-year high yesterday, with support from Middle East tensions and record long bets by fund managers balanced by rising USA production.

Regional concerns in the Middle East include the war in Yemen and growing tensions between Saudi Arabia and Iran.

Brent crude was worth around $62.81 per barrel, while WTI oil was down to $56.44 per barrel around 1pm Tuesday, UK time.

Bahrain said over the weekend that an explosion which caused a fire at its main oil pipeline on Friday was caused by sabotage, linking the attack to Iran, which denied any role in the incident.

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