Markets are thirsty for oil because they are absorbing OPEC+ production increases without building inventories, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Wednesday.
OPEC+, which pumps about half of the world’s oil, has been curtailing production for several years to support the market. But it has reversed course this year to regain market share and as U.S. President Donald Trump demanded the group pump more to help keep gasoline prices lower.
OPEC+ began to unwind cuts of 2.17 million barrels per day in April with a boost of 138,000 bpd. Hikes of 411,000 bpd followed each month in May, June and July. On Saturday, the group approved a 548,000-bpd jump for August.
Mazrouei said he was not worried about supply overhang even after the latest production rises.
“You can see that even with the increases for several months we haven’t seen a major buildup in inventories, which means the market needed those barrels,” he said.
“What we want is stability and you cannot be short-sighted just by looking at the price. We need the price to be right for investments to happen,” he said, adding that many countries with large oil reserves were still not investing enough.
Mazrouei was speaking on the sidelines of a biennial OPEC seminar, which brings together ministers and executives from oil majors.
OPEC has withheld media access to reporters from Reuters and several other news organisations to cover the seminar, reporters and several people familiar with the matter said. OPEC declined to comment on why it was curbing media access to the seminar.
Saudi Energy Minister Prince Abdulaziz bin Salman spoke at the seminar about the need for a flexible energy transition guided by data and technology, including oil and gas and not at the cost of affordability, participants told Reuters.
OPEC+ will likely approve an increase of around 550,000 bpd for September when it convenes on August 3, sources told Reuters.
That will complete the return to the market of 2.17 million bpd of voluntary cuts from eight OPEC+ members and allow the UAE to also complete an additional 300,000 bpd output jump.
OPEC+ still has separate cuts of 3.65 million bpd in place, consisting of 1.65 million bpd in voluntary cuts by eight members and some 2 million bpd across all members. The cuts expire at the end of 2026.
Source: Reuters