No need for early Opec+ meeting, says Al Mazrouei

There is no need for the OPEC+ group of oil producing nations to meet earlier than scheduled, the UAE Energy Minister said on Monday, following Russia’s announcement at the end of last week it would unilaterally cut output.

“I do not see a requirement for a meeting. The market is balanced,” Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Infrastructure, said when asked whether the Organisation of the Petroleum Exporting Countries and allies, led by Russia, would bring forward their next planned meeting.

Russia said on Friday it will cut oil production by 500,000 barrels per day (bpd) next month after the West imposed price caps on Russian oil and oil products.

Opec+ agreed in October to cut oil production targets by 2 million bpd until the end of 2023. An Opec+ ministerial committee is set to meet in early April with a full ministerial meeting planned for June 4.

Brent oil prices settled over two per cent higher on the Russian cut news on Friday and were trading broadly steady at just over $86 a barrel at 1239GMT on Monday.

Mazrouei said the agreement was “long term” for a reason and that they would only consider altering it if the group saw something “that would shake the market”.

“We haven’t seen that. The market is balanced and stable,” he added.

When later asked what factors Opec+ considered could shake the market, he cited the easing of Covid-19 restrictions in China and the state of the global economy.

“China is one of the important factors and it is a positive sign that is coming back, and we’re happy for that,” Al Mazrouei said.

At the same time, he said people were attempting to use less oil “not because the prices are higher but because the whole economy is a little bit tight so people are conserving on everything”.

Oil falls on demand fears

Meanwhile, oil prices slipped on Monday as investors focused on short-term demand concerns ahead of key US inflation data.

Brent crude futures fell 25 cents, or 0.2 per cent, to $86.14 a barrel by 115per cent GMT after a 2.2 per cent gain on Friday. US West Texas Intermediate crude was down 25 cents, or 0.3 per cent, at $79.47 after a 2.1 per cent gain in the previous session.

“Crude prices are softening as energy traders anticipate a potentially weakening crude demand outlook as a pivotal inflation report could force the Fed to tighten policy much more aggressively,” said Edward Moya, senior analyst at OANDA, referring to US consumer price data due on February 14.

“This week could deliver a make or break moment in how bad a recession Wall Street prices in.”

The US Federal Reserve has been raising interest rates to rein in inflation, leading to concerns that the move would slow economic activity and demand for oil.

Additionally, supply concerns were relieved somewhat as a cargo of Azeri crude set sail from Turkey’s Ceyhan port on Monday, the first since a devastating earthquake in the region on February 6.

Ceyhan is the storage and loading point for pipelines that carry oil from Azerbaijan and Iraq.

Oil prices had risen on Friday after Russia, the world’s third-largest oil producer, said it would cut crude production in March by 500,000 barrels per day (bpd), or about five per cent of output, in retaliation against western curbs imposed on its exports in response to the Ukraine conflict.

Both the Brent and WTI contracts rose more than eight per cent last week, buoyed by optimism over demand recovery in China after Covid curbs were scrapped in December. — Reuters

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