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07 December 2023

Opec unlikely to reduce output: Qatari minister

Oil inventories built up as demand slumped during the slowdown in 2008 and 2009. (REUTERS)

By Reuters

Opec is unlikely to cut oil supply at its next meeting in March, Qatar's oil minister said yesterday.

US crude traded at $77.83 a barrel yesterday, within the $75 to $80 a barrel range that top oil exporter Saudi Arabia and other Opec members have said was fair to both producers and consumers.

"I don't think Opec will cut in its March meeting," Qatar's Abdullah Al Attiyah said at an industry event.

Fellow core Gulf Opec member Kuwait said last week there would be no need for any change in March, describing the oil price, then at around $82, as "fantastic". But the oil minister of the UAE sounded a more cautionary note yesterday "I think he market is oversupplied," Mohammed Al Hamli told reporters. Oil stocks were high, at around 58 to 59 days of forward demand, he said. That was about six days more than the 52 to 53 days Opec would like.

Oil inventories built up as demand slumped during the economic slowdown in 2008 and 2009.

Brimming oil storage has long been a concern of Opec members. But with oil prices at levels that most in Opec see as acceptable, ministers have decided against cutting supply further to reduce inventories.

US crude hit a 15-month high near $84 last week, up from a low near $32 a barrel in December 2008.

The producer group kept supply targets unchanged through all of 2009 after making record supply cuts in 2008 to address a slide in demand and prices with the onset of the global slowdown and a corresponding fall in energy demand.

Qatar and Turkey have continued to study the feasibility of a gas pipeline between the two countries, Attiyah said, adding it was too early to give any further details on the project.

The two countries said in September they had formed a team to start work on the project to pipe Qatari gas to Turkey. Qatar is the world's largest exporter of liquefied natural gas, but only has one functioning pipeline export project, which takes its gas to the UAE. The state sits on the world's third largest gas reserves.


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