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UAE Energy Minister: Oil Market Is Balanced

United Arab Emirates Energy Minister Suhail al-Mazrouei. (dpa)
United Arab Emirates Energy Minister Suhail al-Mazrouei. (dpa)
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UAE Energy Minister: Oil Market Is Balanced

United Arab Emirates Energy Minister Suhail al-Mazrouei. (dpa)
United Arab Emirates Energy Minister Suhail al-Mazrouei. (dpa)

There is no need for the OPEC+ group of oil-producing nations to meet earlier than scheduled, the United Arab Emirates energy minister said on Monday, following Russia's announcement last week that it would unilaterally cut output.

"I do not see a requirement for a meeting. The market is balanced," Suhail al-Mazrouei said when asked whether the Organization of the Petroleum Exporting Countries and allies would bring forward their next planned meeting.

Russia said on Friday it will cut oil production by 500,000 barrels per day (bpd) next month after the West imposed price caps on Russian oil and oil products.

OPEC+ agreed in October to cut oil production targets by 2 million bpd until the end of 2023.

An OPEC+ ministerial committee is set to meet in early April with a full ministerial meeting planned for June 4.

Brent oil prices settled over 2 percent higher on the Russian cut news on Friday and were trading broadly steady at $86.06 a barrel at 16.18 GMT on Monday.

Mazrouei said the agreement was "long term" for a reason and that they would only consider altering it if the group saw something "that would shake the market".

"We haven't seen that. The market is balanced and stable," he added.

When later asked what factors OPEC+ considered could shake the market, he cited the easing of COVID-19 restrictions in China and the state of the global economy.

"China is one of the important factors and it is a positive sign that [it] is coming back, and we're happy for that," Mazrouei said.

At the same time, he said people were attempting to use less oil "not because the prices are higher but because the whole economy is a little bit tight so people are conserving on everything".

Oil may resume its rally in 2023 as Chinese demand recovers and lack of investment limits growth in supply, OPEC officials told Reuters, with a growing number seeing a possible return to $100 a barrel.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.