MONTREAL (Reuters) - Members of the Organization of the Petroleum Exporting Countries are close to reaching an agreement on extending production cuts, the energy minister of the United Arab Emirates said on Tuesday.
Speaking at the International Economic Forum of the Americas, Energy Minister Suhail bin Mohammed al-Mazroui said that given existing oil inventories the output curbs should remain in place or be extended “at least until the end of the year.”
The “right decision will be a rollover,” said al-Mazroui, noting he favors continuing the curbs.
OPEC and producer allies including Russia last year agreed to cut their output beginning on Jan. 1 to avoid a supply glut. The agreement was to reduce supply by 1.2 million barrels per day (bpd) for six months using October production as a baseline.
Even as OPEC and allies reduce output, U.S. shale output has continued to rise and some analysts predict weaker economic growth will reduce oil demand. U.S. shale producers this month will add 83,000 bpd, hitting 8.49 million bpd, the Energy Information Administration said last month.
“I think the demand for oil will remain solid in 2020,” al-Mazroui said later in an interview on the sidelines of the economic forum.
OPEC is currently scheduled to meet on June 25, followed by talks with its allies led by Russia on June 26. However, Russia suggested moving the meeting to July 3-4 and Riyadh supports the request, sources within the organization previously told Reuters.
Iranian Oil Minister Bijan Zanganeh, in a letter seen by Reuters, said he disagreed with an OPEC proposal to reschedule the group’s next meeting to early July.
“We are working the dates,” al-Mazroui told reporters later on the sidelines of the forum, emphasizing that he did not have a preference for June or July.
“To me it doesn’t matter,” he said. “We’re talking about a separation of two weeks. The most important is what we know today and what we know today tells us that we need to extend, in my view.”
He added he believes trade tensions between the United States and China will be resolved going forward.
Reporting by Allison Lampert in Montreal; Editing by Lisa Shumaker and Matthew Lewis