2023-07-21 19:22:00
The UAE: a “phone call” is enough to reinforce the “OPEC Plus” moves
UAE Energy Minister Suhail Al Mazrouei told Archyde.com on Friday that the current measures being taken by the OPEC Plus coalition to support the oil market are sufficient at the present time, adding that the alliance “only needs a phone call” if any further steps are needed.
“What we are doing is enough as we say today,” the minister told Archyde.com during a visit to New Delhi. “But we meet constantly and if there is an urgent need to do anything else during those meetings, we will do it.” It only takes a phone call.”
The OPEC Plus alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, pumps regarding 40 percent of the world’s crude oil. The alliance has been limiting supply since late 2022 in an effort to support the market.
In the most recent policy meeting held last June, the coalition agreed to continue to limit production until 2024. Saudi Arabia pledged to voluntarily reduce production in July, which it has extended until next month.
Oil prices received some support following evidence of tight supply emerged, with Brent crude trading above $80 a barrel on Friday, up from around $71 in late June.
The OPEC Plus alliance will hold its next policy meeting in November, but a committee of key ministers will hold a meeting on August 4 to review the market situation.
In the markets, Brent crude prices rose (Friday) amid market assessment of the possibility of announcing economic stimulus measures in China following weak economic data, in addition to declining inventories in the United States and reducing supplies from two major producers.
Brent crude futures rose 63 cents to $80.27 a barrel by 04:25 GMT, while US West Texas Intermediate crude rose 62 cents to $76.27 a barrel. Prices ended (Thursday) slightly higher.
For the week as a whole, Brent crude tended to rise by 0.5 percent, while US crude rose by 1.1 percent. This means that the two benchmarks continued to rise for the fourth week in a row.
Weak economic data from China weighed on oil prices all week following the world’s second-largest oil consumer reported disappointing growth in gross domestic product for the second quarter, raising the possibility of missing the government’s 5 percent annual economic growth target.
However, sentiment in commodities markets has been revived on hope that the central government will introduce more stimulus measures to support the economy. Beijing announced on Wednesday that it would lay out plans to stabilize growth in 10 sectors, as well as increase support for private firms.
Supporting prices was a decline in US crude inventories, supported by a jump in crude exports, the Energy Information Administration said on Wednesday.
In addition, recent data, such as a lower-than-expected inflation rate and moderate job growth, have convinced many investors and analysts that the Federal Reserve’s expected rate hike this month will be the last in the current tightening cycle. Higher interest rates might slow economic growth and lower demand for oil.
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