With the Opec and non-Opec alliance working to eliminate the remaining glut on the oil market amounting to 75 million barrels, the UAE energy minister said stability was slowing returning and the market was likely to rebalance this year.  

The Opec deal was working fine thanks to the co-operation from non-Opec group, mainly Russia, which is a critical country to the group. The understanding between the different countries participating in this group have increased significantly from where we started last year, remarked UAE Minister of Energy Suhail Al Mazrouei while speaking to Bloomberg TV.

"We have done the optics and the inventories have been declining. We have removed from last year till today around 266 million barrels, which means that the deal is working and we also are removing from the inventories, which means there is not lots of oil in the market," stated the minister.

"There is a correction attempt and it has been working very well thanks to the Opec and non-Opec group. The market is reaching, hopefully this year, balance and stability," he added.

On the output cut deal being extended into 2019, the Opec president said it was premature to jump to a decision beyond what has already been done.

"We met in November last year and we have decided to roll over the deal for a full year. We are monitoring the different factors affecting the world demand. It's to ensure we have adequate measures to balance the market within this year. I think the deal has been remarkably working very well," he stated.

"The compliance level has been beyond the 100 per cent for 2017. Fourth quarter we have seen more than 100 per cent to in December we released 129 per cent," remarked the UAE minister.

When asked about the timeline for market rebalance, Al Mazrouei said: "We are expecting it to happen this year. It is very difficult to predict exactly which quarter. I think, like I said earlier, the shale oil production had been increasing and we are expecting this year it is going to be higher than obviously 2017."

"This is one factor, there is the production coming outside, the Opec and non-Opec group alliance. We need to monitor everything and that will decide what exactly the time for a full balance of the market," he told Bloomberg TV.

On his next plan of action, the Opec president said: "For myself and the secretariat is to try to draft a charter of how are we going to continue working together for the sake of better economic growth of the world and for the sake of ensuring that we have adequate supply to the world demand and oil."

"As you know, we are moving rapidly to the delivery of 100 million barrel demand per day. There are very limited areas where we can see that supply to come. As well, we have some declining oil fields that need replacement in terms of reservces. There are many issues to the supply side as there are issues on the demand side as well," he added.

In his Bloomberg TV interview, Al Mazrouei lauded the vital role played by Saudi Arabia in sticthing together the alliance with the non-Opec players.

"They have done remarkably well. First of all, for the Saudi Oil Minister, and in the year 2017, this is a historical year actually for him personally and the country in putting together this group of 24 countries. The Saudi role in reaching out to Russia and ensuring that Russia and the countries from outside Opec get together," he stated.

"I think this has been a great effort from Saudi Arabia to balance the market, as Opec’s largest producer, Saudi Arabia, historically, has been a critical member and responsible member that keeps us together," stated the Opec chief.

"And I think Saudi Arabia, the positive things happening in Saudi Arabia in terms of reforms are to the better of the Opec group and the larger 24 groups and also to the world economy. So I’m confident that Saudi Arabia is always going to be responsible and responsive to what this group of 24 is trying to do," he added.

On the present market scenario, Almazrouei said: "I am not yet happy because we still have room to improve the over storage, the overhang in the market. We have still around 70-plus, $75 million barrels to be removed and i think we are focused on achieving the market balance."

"When it is going to happen, I think it is going to happen this year, and once -- until we are there, I’m still not yet see our job has finished. Our job is still to ensure we reach the market balance," he added.-TradeArabia News Service