Opec ministers who gathered at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) came out yesterday in support of keeping oil prices above $100 a barrel says The National
"I think it's really balanced … the market is in good shape," said Ali Al Naimi, Saudi Arabia's oil minister, as a barrel of Brent crude - considered the world benchmark for oil prices - sold at more than $109.
His comments, which were echoed by officials from Iraq and the UAE, showed unity from Opec in the face of declining global demand for the group's crude.
Mr Al Naimi confirmed that Saudi crude production had been reduced to 9.7 million barrels per day (bpd), the level held since August. This is down from production of almost 10 million bpd, as the kingdom took the lead in calming the oil markets over fears that an embargo on Iranian oil would cause prices to spiral.
Opec last week forecast that demand for its oil will drop, partially because of economic factors, and because countries outside the group are increasing their production.
But while Opec has acted to avoid an oil price increase that would have derailed the world economy, it appears at ease with the current price level.
Other major producers have fallen in line with Saudi Arabia.
"We are happy with the current oil price, but we are happy with it as long as customers are happy with it and they are asking for more crude," said Mohammed Al Hamli, the UAE's Minister of Energy.
"The market is balanced," he said, echoing Mr Al Naimi, as they walked next to each other at the opening of Adipec, the capital's flagship oil and gas exhibition that started yesterday.
Abu Dhabi's crude production also remained steady at 2.6 million bpd, Mr Al Hamli confirmed. The emirate's maximum production capacity stands at 2.8 million bpd, as the Abu Dhabi National Oil Company races to reach a capacity of 3 million bpd a year.
Iraq is undergoing by far the biggest efforts by Opec members to lift oil production capacity. The country's resurgence as a major producer threatens to unsettle a consensus among the group's members.
But Baghdad's oil minister agreed with his counterparts at Adipec, a further sign that Iraq and Saudi Arabia are distancing themselves from a confrontational stance that has marked their relations within Opec in the past.
"We think the price is still acceptable for all - the producers and the other side," said Abdul-Kareem Luaibi, Iraq's oil minister.
Mr Luaibi did not expect that Iraq's production quota was likely to be an issue at the next Opec meeting next month..
He also played down the prospect that Saudi Arabia and other producers would have to curb their output to accommodate rising Iraqi production.
Production in Iraq now stands at about 3.2 million bpd, and could rise to 3.4 million bpd at the beginning of next year, according to the minister.
In its latest monthly report on the oil markets, Opec predicted that demand for its crude next year will be 100,000 bpd less than previously forecast, so that demand for Opec oil will be 400,000 bpd less next year.
The global economy is adding Opec's concerns, and it has revised next year's demand for oil from all sources by 40,000 bpd.
"The risk [to oil market stability] depends on what happens to the economic recovery in the US, Europe, China, India," said Mr Al Naimi.
© 2021 CPI Financial. All rights reserved.