Dr Mohammad Bin Saleh Al-Sada, Minister of Energy and Industry said in a statement that after nearly three years of build-up in oil stocks, the process of re-balancing supply and demand is finally gaining momentum.
Dr Al-Sada said that the breakthrough was mainly due to the excellent compliance to the agreed production cuts by OPEC members and participating non-OPEC countries. OPEC and eleven non-OPEC producers agreed late last year to cut production by 1.8 million barrels per day, in what was later known as the Vienna Accords. The minister said that since the Accord went into force on 1 January this year, OPEC countries have shown full and unprecedented compliance. Even participating non-OPEC producers also demonstrated considerable commitment to the agreement, according to the minister.
We are optimistic that the extension of the agreement to the second half of this year will improve market stability, due to the higher expected demand in Q3 and Q4. This is further supported by the fact that the world economic situation is progressively improving. We also see merits of extending the agreement further to the 1st Quarter of 2018, when the demand is seasonally lower.’
A number of oil producers have shown their support for an extension of the deal. A final decision is expected after the upcoming OPEC ordinary meeting scheduled in Vienna this month, which will be followed by a joint meeting between OPEC and participating non-OPEC countries.
For additional information on Qatar’s energy industry, visit mei.gov.qa.