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Extension of output cut deal in focus as GCC oil ministers gather in Abu Dhabi

Extension of oil output cut deal in focus at Abu Dhabi forum Photo Credit:Reuters/Heinz-Peter Bader
Thirteen members of the Organisation of the Petroleum Exporting Countries and 11 non-Opec members agreed to cut production by about 1.8 million barrels a day to prop up oil prices in December last year

Tuesday, Apr 18, 2017

Abu Dhabi: The possible extension of output cuts by Opec and non-Opec countries will be in focus when oil ministers from six Gulf Cooperation Council countries gather in Abu Dhabi for the third GCC petroleum media forum, which begins on Wednesday.

Thirteen members of the Organisation of the Petroleum Exporting Countries (Opec) and 11 non-Opec members agreed to cut production by about 1.8 million barrels a day to prop up oil prices in December last year.

Opec agreed to slash output by 1.2 million barrels a day and non-Opec members, led by Russia, promised to cut 558,000 barrels a day. Oil prices jumped by more than 10 per cent following the deal with international benchmark Brent crude currently trading at around $55 per barrel.

Libya and Nigeria have been exempted from the deal as their production is affected due to internal conflicts, and Iran has been allowed to increase production to pre sanction levels of about four million barrels a day.

The deal ends in June and Opec member countries will gather in Vienna at the end of May to decide whether to extend the agreement further to balance oil markets.

“The deal is going to be extended, in spite of rising US production and the increasing geopolitical tension building up in the Middle East. We believe that the economic interest of the signatory nations will prevail, but the extension is far from granted, it will be a close call,” Francisco Quintana, Head of Strategy at Foresight Advisors told Gulf News.

“Our main concern now is the rising consensus about the agreement that we have perceived among market participants in the last few days. Over-optimism, coupled with concern about North Korea might inflate prices excessively in the next weeks.”

The two day event begins with a speech by the UAE Energy minister Suhail Al Mazroui, followed by a national keynote lecture by Dr Sultan Al Jaber, minister of state, CEO of Adnoc (Abu Dhabi National Oil Company) and chairman of the board, National Media Council.

There will be an Opec feature interview with Mohammad Barkindo, secretary general of Opec on the first day of the forum.

On the second day, Saudi Arabia’s minister of energy, industry and mineral resources Khalid Al Falih will deliver a regional keynote speech followed by a ministerial panel discussion on the role of media and the future of the energy markets. Energy ministers from the six GCC countries will take part in the panel discussion.

Fareed Rahman, Senior Reporter

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