The OPEC+ group must consider rising oil demand when it makes decisions about production levels, the energy minister of one of OPEC’s top producers, the United Arab Emirates (UAE), said on Tuesday.
The OPEC+ alliance is doing its best to balance the oil market, UAE’s Energy Minister Suhail Mohamed Al Mazrouei said at an Abu Dhabi forum today.
“But it is not enough only this group, we need the help of others, and we need to be mindful of the demand,” Al Mazrouei added, as carried by Reuters.
“Demand is picking up, and the market is going to surprise us if we’re not investing in it.”
Asked about OPEC+’s production plans for July, to be decided at a June 1 meeting, Al Mazrouei said,
“This group, that is OPEC+, I would say is doing its best to balance the market and ensure that we have enough investments in the supply.”
OPEC+ ministers are set to discuss oil output levels for July this coming Sunday, and reports suggest the group could opt for another large-sized production increase, for the third consecutive month.
OPEC+ producers are discussing the idea to make another big production increase in oil production for July, delegates from the group told Bloomberg News last week.
OPEC+ has already announced two consecutive production increases for May and June, each of 411,000 barrels per day (bpd), triple the volume the group had previously planned. Another 411,000-bpd output hike is among the options which the OPEC+ member countries that have been withholding output are discussing for the July production.
The latest OPEC+ production policies suggest that top OPEC producer Saudi Arabia is willing to endure a short-term pain with lower oil prices to punish the overproducers in the OPEC+ deal and to start spoiling the shale party in the United States. In America, shale producers are cutting spending and scaling back drilling activity with WTI oil prices close to or lower than the breakeven price for profitably drilling a new well.
By Tsvetana Paraskova for Oilprice.com
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