The Energy Ministry said yesterday that oil markets were showing a positive trend towards rebalancing as demand rises and production slows around the world.
Energy Minister HE Dr Mohamed bin Saleh al-Sada, who is the current president of the Opec conference, arrived in Vienna yesterday where the group will meet today.
The rebalancing of the market is “largely due to a rise in demand and the slowing down or outage of many production stations around the world, let alone the retreat in investments in the sector,” the ministry said in a statement.
It said the agenda for today’s Opec meeting includes the current global oil market, expected developments in production levels, supply and demand, investments in the oil sector and dialogue with non-Opec producers.
Meanwhile, a senior Opec source has told the Reuters news agency that Gulf countries are seeking co-ordinated action by the producer group to help stabilise the oil market.
Oil settled down yesterday on technical resistance at around the $50 a barrel mark, with the market retracing most earlier declines after Opec sources said the group would likely consider a production curb at its meeting.
Reuters cited four Opec sources as saying the Organisation of the Petroleum Exporting Countries was likely to discuss an output ceiling at today’s meeting.
Three sources said the ceiling needed to be set substantially above 30mn barrels per day and lengthy discussions may be required.
A lower output ceiling would represent a major compromise for Opec, which failed to agree on a production cap for the first time in years at its last meeting, in December.
“If they get a quota in place, that would certainly be bullish for oil, given that no surprises were expected at all from this meeting,” said Phil Flynn, analyst at the Price Futures Group in Chicago.
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