Energy minister says 158 million barrels of surplus crude oil remain on the market
Oil producers are expected to unanimously extend a production cut accord later this month but its duration is still under discussion, the UAE energy minister said on Monday.
"I think this group of committed and responsible producers came together... and I think they will continue to do what it takes to take us to the next level," UAE Energy Minister Suheil al-Mazrouei told the ADIPEC international oil conference in Abu Dhabi.
He said 158 million barrels of surplus crude oil remain on the market and "we need to reduce that -- which means there is a potential for extension".
Mazrouei said there was near-unanimity among the 24 OPEC and non-OPEC producers which agreed a year ago to cut output by 1.8 million barrels per day.
The minister said that he had "not heard anyone" talks about allowing the cuts deal to expire, although the duration of the new extension would be "subject to discussion".
"I am hopeful that we will reach an agreement that will lead to more stabilisation in the market and more investments coming to the market," he said.
Mazrouei said an escalating dispute between regional powers and OPEC members Saudi Arabia and Iran will not prevent a new extension.
As a result of the cuts, oil prices have rebounded to more than $64 a barrel from $40 a year ago, and huge stocks of crude built up over the past three years have reduced.
Mazrouei, whose government is OPEC's fourth largest oil producer, said he was not happy with the sharp fluctuations in prices, saying they need to be more stable.
OPEC ministers are scheduled to hold a crucial meeting in Vienna at the end of November to discuss extending the cuts deal as well as imposing the quota system on countries that have so far been exempted, namely Libya, Iran and Nigeria.
Cartel kingpin Saudi Arabia and the world's top producer Russia have voiced support for a rollover to the deal, the duration of which remains up for debate.
OPEC Secretary General Mohammed Barkindo said the producers deal had yielded solid results as a "valid response to the worst oil price down cycle in history".
"There are clear indications that the market is rebalancing at an accelerating pace," he said at the conference.
Barkindo said the oil market was on track to stabilise because of a drop in crude stocks and a rise in global demand.
The OPEC chief also called on new oil producers, including US shale crude producers, to join a broader agreement to secure the future of energy.
Barkindo said talks were under way to "institutionalise" the cooperation between OPEC and non-OPEC members to regulate the market.
"Now, we are not talking about OPEC 14 but about the global platform 24," he said, referring to the number of oil-producing members that signed the production cut accord.