The UAE's energy minister said on Monday that current, low oil prices are forcing many producers to freeze output but that a correction in prices would take time.
OPEC leader Saudi Arabia and non-OPEC producer Russia, the world's two largest oil exporters, agreed last month to freeze output at January levels to prop up prices if other nations agreed to join the first global oil pact in 15 years.
"I believe that the current oil prices are forcing everyone to freeze so I think it is happening as we speak. It doesn't make any sense for anyone to increase production at the current prices," Suhail bin Mohammed al-Mazrouei told reporters.
"The majority of the world, 99.8 percent, maybe 99.9 percent, are not going to increase production. To the contrary many producing assets are losing now at the current oil prices... We are seeing a reduction and we will see a reduction in those fields," he said.
"This is all good news towards balancing the market. We just need to be patient. It's not happening in weeks or months. Correcting to a sustainable price will take time. I'm still optimistic that before the end of year we will see a correction."
Front-month Brent crude futures were trading at $39.10 per barrel at 0745 GMT on Monday, up 38 cents from their last settlement and around a third higher than their January low, when prices fell to levels not seen since 2003.
Yet the freeze accord has so far failed to have a dramatic impact on crude prices, partly because OPEC's third-largest producer Iran plans to steeply raise production after the lifting of international sanctions on the Islamic Republic in January.
Mazrouei declined to comment on Iran's production plans. He also said he has not received an invitation yet for a meeting between OPEC and other leading oil producers about freezing oil output.
"I have not received an official invitation for an OPEC and non-OPEC meeting. If there is a unanimous decision among OPEC we will in the UAE as always cooperate with any efforts to tackle this situation together," he said.
Russian Energy Minister Alexander Novak said on Friday that a meeting between OPEC and other leading oil producers about freezing oil output could take place between March 20 and April 1. Novak said that the meeting could take place in Russia, Vienna or Doha.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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