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Oil Prices Shoot Up On Large Inventory Draw

Oil Prices Shoot Up On Large Inventory Draw

Oil prices rose on Wednesday…

Markets Brace For U.S. Decision On Iran Sanction Waivers

Markets Brace For U.S. Decision On Iran Sanction Waivers

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ADNOC Plans Further Oil Output Reduction

Abu Dhabi

UAE’s Abu Dhabi National Oil Company, or ADNOC, will cut its crude oil output by 139,000 bpd in November as part of the UAE’s commitment to the OPEC/non-OPEC production cut deal, the Emirates’ Energy Minister Suhail al Mazrouei said.

The figure is equal to the output reduction quota that the UAE agreed to implement as part of the agreement, from a reference level of 3.013 million bpd. So far this year, the UAE’s total production level has been consistently above the target of 2.874 million bpd.

For the first quarter of 2017, according to OPEC figures, ADNOC pumped an average 2.935 million bpd and in the second quarter, it produced 2.91 million bpd of crude. Between July and August, output fell by 20,000 bpd to 2.901 million barrels.

The announcement comes as Brent starts to slide back down after hitting the highest price level for this year. The slide began as production data for September started coming in, with U.S. drillers adding rigs for the first time in seven weeks and Iraq saying its exports of crude last month inched up.

According to Reuters data, OPEC oil production increased in September on the back of higher output in both Iraq and Libya. No specific figures were made available, however. The news of a production increase after August figures showed that global supply has shrunk to the five-year OECD average range, which OPEC took as target for its cut, is nevertheless bound to arrest the oil price rally, the highest third-quarter one since 2004.

In this context, the ADNOC announcement sounds perfectly timed as an attempt to stop the slide, just as earlier statements from government officials from OPEC have tried to convince market participants that the output cut deal is working.

By Irina Slav for Oilprice.com

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