The UAE has announced production cuts for the month of March in line with an agreement between the Organisation of Petroleum Exporting Countries (Opec) and non-Opec countries aimed at balancing oil markets to support prices.
In a tweet on Tuesday, Energy Minister Suhail Al Mazroui said the Abu Dhabi National Oil Company (Adnoc) will reduce its Murban crude allocation by 25 per cent, with customers having been notified.
The Murban crude oil blend is produced from Adnoc’s onshore oilfields. Under the Opec & non-Opec Declaration, the UAE is committed to achieving a reduction in crude oil output of 139,000 barrels of oil per day, according to a statement on WAM.
Opec and non-Opec members led by Russia are cutting production by about 1.8 million barrels a day to help lower global oil inventories and prop up oil prices.
The agreement, which initially called for a six-month period, was later extended until the end of 2018, with participating countries recording a good level of conformity.
In December 2017, Opec and non-Opec producing countries achieved an conformity level of 129 per cent, the highest since the start of the Declaration of Cooperation in 2016, according to a statement by Opec earlier this month.
“Conformity levels have increased on a monthly basis, from 87 per cent in January to the outstanding current level,” Opec said.
Brent, the global benchmark, is currently trading above $69 per barrel while West Texas Intermediate (WTI) is about $65 per barrel.
Speaking at the Gulf Intelligence UAE forum recently, Al Mazroui said that the oil market is balancing but still has some room for improvement.
“We are continuing to see market correction, as we move into 2018 and we will see more correction happening. We still have 100 million [barrels of oil] that need to be removed,” he said.
Mazroui, who is also the Opec president for 2018, expects more investments to come onto the market next year due to stronger demand for oil.
Adnoc announced investment of almost $109 billion throughout the value chain over the next four years and Saudi Aramco is also planning new investments in the next three years, he added.
The UAE’s crude oil production in December reached 2.87 million barrels per day.