The global crude oversupply that has caused prices to slump since 2014 is correcting itself, the oil minister of the United Arab Emirates said Tuesday on arrival in Vienna ahead of an OPEC meeting this week.
“From the beginning of the year until now, the market has been correcting itself upward,” U.A.E. Oil Minister Suhail Al Mazrouei told reporters in Vienna on Tuesday. “The market will fix itself to a price that is fair to the consumers and to the producers.”
Mazrouei’s comments — the first by an OPEC minister this week ahead of their meeting on Thursday — suggest renewed optimism among producers as oil prices rose more than 85 percent since touching a 12-year low in February on the back of supply outages, lower production outside OPEC and stronger-than-expected demand. The Organization of Petroleum Exporting Countries is unlikely to reach an agreement limiting production this week as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
OPEC’s policy of giving the market time to balance itself has proven to work but it still needs some time for proper balance, Mazrouei said on Twitter after his arrival in Vienna. “The market is still in correction mode and the signs are positive.”
The oil market is “doing good,” Emmanuel Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, said on arrival in Vienna on Tuesday. However, it is “too early” to say whether oil prices are recovering.
Nigeria is “absolutely” confident about its candidate to replace OPEC Secretary General Abdulla El-Badri. Nigeria’s candidate, Mohammed Barkindo, briefly headed the Nigerian National Petroleum Corp. and was OPEC’s acting secretary-general in 2006 after serving for a number of years as one of the country’s representatives to the producers’ group.
OPEC will consider whether West African oil producer Gabon should rejoin the group at its meeting on Thursday, according to three people familiar with the matter, who asked not to be identified. Gabon was a member of OPEC from 1975-1994. The country pumped 215,000 barrels a day of crude oil in October, according to the U.S. Department of Energy, which would make it OPEC’s smallest producer.