OPEC minister downplays need for further production cuts to balance market

(Bloomberg) – A key OPEC+ minister played down the need for further cuts to balance supply and demand, weeks after the organization shocked the oil market by announcing a round of large production reductions.

“I’m not that worried about the very, very short term,” Suhail Al Mazrouei, the energy minister for the United Arab Emirates, told reporters in Abu Dhabi Tuesday. “Let’s wait. This is not a prediction that I can give now or a decision, this is a collective decision,” on whether further OPEC+ supply adjustments are needed, he said.

OPEC and its allies are currently proceeding with preparations for an in-person meeting at its Vienna headquarters next month. The UAE is the third-biggest producer within group.

Crude has retreated more than 9% this year, with futures whipsawed by the Federal Reserve’s monetary-tightening campaign, concerns of a U.S. recession, and countervailing hopes for a resurgence in Chinese demand. The decline in prices has come despite last month’s surprise production cut by the Organization of Petroleum Exporting Countries and its allies including Russia.

Al Mazrouei warned that the bigger risk to supply was the weak level of investment over the coming years. “If we don’t see companies and countries investing, we could see a shortage in the future,” he said.