Just a month has passed since OPEC rolled over the production cuts, but the still high inventories and the latest drop in oil prices have renewed comments, rumors, and possibly hope, that the cartel may cut deeper to speed up the drawdown of the glut. OPEC now says, Hope no more.
In the latest such comment, the UAE’s Energy Minister Suhail bin Mohammed al-Mazroui said on Thursday that OPEC was not talking about making steeper cuts.
“I think OPEC countries and non-OPEC countries who joined us have done their part. We are looking at the others to do their part as well. We are not worried about the market recovery,” al-Mazroui said on the sidelines of an International Energy Agency conference in Paris, as quoted by Reuters.
Two weeks after the cartel decided to extend the production cut into March 2018, Saudi Energy Minister Khalid al-Falih said that deeper cuts were not out of the question, but added that it was too early to discuss steeper cuts now, as the current rate of cuts was working and the effects would become apparent by the end of next month.
“Nothing is off the table but today nothing is on the table either,” al-Falih said back then.
Two weeks later, Iran weighed in, with its Oil Minister Bijan Zanganeh saying that OPEC producers were holding discussions on potentially deepening the cuts, although some cartel members believed at the time that the current deal simply needed more time to draw down oil inventories. Related: Is Big Oil’s Bet On Petrochemicals A Bust?
According to OPEC delegates, the cartel won’t be rushing to make that decision, even though a panel monitoring the cuts will be meeting next month.
Today was the UAE’s turn to entertain the market.
“Of course additional production coming from several producers is prolonging the recovery but I think that is rather short-term. We hope to see more recovery in the third and fourth quarters,” al-Mazroui told journalists.
The minister also tweeted: “Despite the decline in the oil prices at the end of Q2, we expect a healthy demand at the 3rd and 4th Quarter.”
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By Tsvetana Paraskova for Oilprice.com
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