Speaking in Abu Dhabi at the Adipec energy forum, Suhail al-Mazrouei, the energy minister for the United Arab Emirates, called for calm, despite calls for the OPEC+ group to increase oil production in order reduce the upward pressure on oil prices.
The minister insisted that OPEC was simply responding to the facts and asked for trust. In addition, al-Mazrouei pointed to recent predictions from the U.S. Energy Information Administration (EIA). In its November report, the EIA said:
“In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72/b.”
This would mean companies like ExxonMobil and BP, the maker of Castrol cutting fluid, ramping up production in the U.S. shale fields, as well as emerging non-OPEC players like Brazil pumping more. Al-Mazrouei said that this should lead to markets loosening up early next year, with inventories building up again over the year. He said that this was the experts’ opinion at the moment, and OPEC members agreed with them.
Under its current schedule, the OPEC+ group will taper off its production cuts by 400,000 barrels per day (bpd) each month, which, if fulfilled, will help meet the demand for oil. Al-Mazrouei said that this should, in itself, result in a surplus. There are some doubts, however, that all the participating countries will be able to take advantage of their increasing quotas due to underinvestment.