The demand for oil remains “healthy”, the UAE’s Minister of Energy told Gulf Business on the sidelines of a summit in Dubai last month.
However, Suhail bin Mohammed al-Mazroui declined to reveal what his expectations for oil prices were for this year.
The energy minister previously said that he expects a higher level of commitment from oil producers for a deal to cut output that took effect earlier this year.
“The first month I see the commitment around OPEC has been there from the various independent sources. The level of commitment is high and we are expecting to see more commitments in the months to come,” he told reporters.
Under the accord signed last year to support dropping oil prices and curtail supply in the market, Organisation of the Petroleum Exporting Countries (OPEC) and other producers including Russia agreed to reduce oil output by nearly 1.8 million bpd for six months.
Early last month, Russian energy minister Alexander Novak also said his country would decide in April or May whether the agreement should be extended beyond the deadline of June 30.
Oil prices have stabilised since the deal was announced, with reports of cuts specifically coming from Saudi Arabia.
Saudi Arabia – the world’s biggest oil producer – reported reduced oil production and exports in December.
The kingdom’s crude oil exports dropped to 8.014 million barrels per day (bpd) compared to 8.258 million bpd in November, according to data from the Joint Organisations Data Initiative (JODI).
Meanwhile, production fell by 255,000 bpd to 10.465 million bpd in December.
The kingdom’s domestic crude inventories also fell 1.745 million barrels to 272.621 million barrels.
However, the oil market also faces pressure from rising production in the US. Late last month, it was announced that the number of oil drilling rigs in the country rose to reach 597 – the highest since October 2015.
Assuming the US oil rig count stays at the current level, production will rise by an average 130,000 bpd from a year ago in 2017, Goldman Sachs said in a research note.
In terms of demand, the global forecast stands at 1.5 million barrels per day in 2017, according to the investment bank.