Oil producers are currently doing a good job of balancing world oil market fundamentals, but it is too early to say if OPEC will leave crude production levels unchanged when it next meets in December, UAE oil minister Suhail al-Mazrouei said Tuesday.
"The current market situation suggests that oil producers are doing a relatively good job at a time when a significant amount of oil has been cut due to an instability in some parts of North Africa and the Middle East," Mazrouei said in an address to the Kazenergy conference in Astana.
"The current oil market situation remains potentially volatile. We see strong economic growth in key emerging markets, particularly China and India, continued weakness in Europe and a collapse in demand for oil imports from the US due to the shale oil and gas production," the minister said.
"It is therefore critical for oil producers to make sure that oil market remains in balance. This means ensuring that enough but not too much oil reaches the market place. We need to monitor the situation carefully," he said.
Mazrouei told Platts on the sidelines of the sidelines of the conference that it would be "premature" to predict the outcome of OPEC's next ministerial meeting, scheduled for December 4 in Vienna.
In his address, Mazrouei also noted that the UAE was investing in new production capacity, and said he was confident it would retain its share of the fast-growing Asian oil market.
"The emergence of shale oil and gas in the US has had a major impact on some countries, notably those in West Africa, that traditionally sold their crude to the US. They have suddenly lost their key market and are having to respond by increasing sales to new markets, including Asia," he said.
"Under normal circumstances this would represent a threat to countries such as the UAE -- however, the strength of our commercial relations with our buyers in Asia will balance this out and will not allow [us to lose] our shares in those markets," he said.
The Abu Dhabi National Oil Company is currently investing heavily to boost the UAE's sustainable output capacity to 3.5 million b/d by 2017, the minister said.
In its September oil market report, the International Energy Agency estimate the UAE's current sustainable production capacity at 2.9 million b/d.
In addition to crude, Mazrouei said the UAE would become one of the world's biggest exporters of LPG in the coming years, as it looks to boost exports to more than 13 million mt/year.
"Our new integrated gas plant project, which is now approaching completion, will on its own add further 3.3 million mt/year," he said.
