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09 December 2023

Oil market well supplied: Hamli

By Reuters

Events in Egypt have helped to drive oil above $100 a barrel and the price cannot be explained by the balance of supply and demand, UAE Oil Minister Mohammed Al Hamli said on Monday, adding the market was well-supplied.

Opec was ready to add oil to the market if there was "an appetite," he said, but saw no need for an extraordinary meeting of the Organisation of the Petroleum Exporting Countries.

The group does not plan to meet formally to reassess output policy until June, although ministers will be able to talk informally on the sidelines of the International Energy Forum in Saudi Arabia on Feb. 22.

"Oil prices react to events and they have reacted to events in Egypt," Hamli told reporters. "The market is well-supplied.

"The price can't be explained by current fundamentals. The stocks are high," he added.

The minister said the UAE was producing around 2.2 million barrels per day (bpd), in line with its Opec output target, and that it had capacity of 2.8 million bpd.

In all, analysts say Opec has in the region of 5 million bpd of spare capacity, most of which belongs to top exporter Saudi Arabia, which can be quickly added to the market if needed.

Hamli saw "a gradual increase in demand," which he said was a sign of global recovery, and although there was a price level at which further demand would be choked off, he said he could not say what it was.

"Naturally, prices do affect demand. We don't want demand to be affected by high prices," he said.
Brent oil prices have risen to a premium of more than $15 to US crude, which historically has been the higher quality and more highly-priced futures contract.

Hamli said there was a distortion, adding traders "had a role" and that stocks in the United States were very high.