Even though oil prices have remained on the rising spree, there are strong indications that oil producers may unanimously extend a production cut accord later this month but its duration is being discussed. This was the position of the UAE energy minister said on Monday.
However, the Minister of State for Petroleum Resources, Dr. Ibe Kachukwu had earlier made it clear that Nigeria is ready for quota imposition any time and his ministry is making necessary arrangements to handle the shocks.
OPEC ministers are holding 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: Libya, Iran and Nigeria.
United Arab Emirates Energy Minister Suheil al-Mazrouei told an international oil conference in Abu Dhabi that “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”.
According to him, 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.
He added that he had “not heard anyone” speak of allowing the extension 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.
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.