The United Arab Emirates (UAE) has similar views to Saudi Arabia on the crude oil markets, a source familiar with the UAE’s thinking told Reuters on Friday, as speculation intensifies over whether the OPEC+ group would consider making new cuts to production again.
The idea of new OPEC+ cuts, just as the previous round of massive reductions is set to be fully rolled back by the end of this month, was aired earlier this week by Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman. The top Saudi oilman said that OPEC+ was ready to cut production at any time in any form if it believes it would bring stability to the “schizophrenic” oil market.
“Markets can’t reflect the realities of the physical fundamentals in a meaningful way and can give a false sense of security at times when spare capacity is severely limited and the risk of severe disruptions remains high,” Prince Abdulaziz bin Salman said in a Bloomberg interview, as carried by the Saudi Press Agency.
The comments from Prince Abdulaziz bin Salman pushed Brent oil prices back up to above $100 a barrel earlier this week.
OPEC’s rotating president for this year, Congo’s Hydrocarbons Minister Bruno Jean-Richard Itoua, also expressed support to potential cuts.
The idea that OPEC+ could consider production cuts in the near future would be in line with OPEC’s view, the rotating president of OPEC, Itoua told The Wall Street Journal on Thursday. Itoua told the Journal that the Saudi idea of new production cuts was “in line with our views and objectives.”
Some OPEC+ producers, including Iraq, Venezuela, and Kazakhstan, have also signaled support for new production restrictions.
OPEC+ meets next on September 5 to discuss market conditions after it approved in early August a small 100,000-bpd increase in the alliance’s collective target for September.
By Tsvetana Paraskova for Oilprice.com
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