Emirates oil minister: OPEC may review its crude production cut decision next month

The Associated Press

The Organization of Petroleum Exporting Countries may review its February decision to cut production when it meets later this month, the Emirates oil minister said March 13.

Obaid bin Saif al-Nasseri said that for now, last month’s agreement to cut production by 1 million barrels to bring down overall output beginning April 1 “remains valid.”

“Reviewing the decision of cutting production, if it happens, will be in the direction of putting it off instead of canceling it,” he said.

OPEC decided in February to curb excess production and trim members’ output quotas by 1 million barrels a day on April 1. The unexpected decision to cut the target to 23.5 million barrels per day was aimed at curbing overproduction by members and keeping prices stable when warmer weather cuts demand in major importing countries. Al-Nasseri said the current price levels justify a review of that decision.

“The oil stocks, while lower somehow compared to previous years, remain good, and don’t represent a threat of shortage in the market,” he said.

Venezuelan Oil Minister Rafael Ramirez said earlier this week that OPEC ministers may decide to make additional production cuts when they meet March 31.

But the International Energy Agency warned March 11 that oil output from OPEC producers — who supply about a third of the world’s oil — has lagged behind the growth in demand in China and other parts of Asia, squeezing oil inventories that already stood at historically low levels, a combination that could drive prices up this summer.

Refiners, meanwhile, are adding to a squeeze on gasoline supplies by planning to shut down their plants for routine maintenance as sales of home heating oil ebb in the Northern Hemisphere.