Oil markets are absorbing OPEC+ production increases without building inventories, which means they are thirsty for more oil, United Arab Emirates’ Energy Minister Suhail al-Mazrouei said on Wednesday.
OPEC+, which pumps about half of the world’s oil, has been curtailing production for several years to support the market. But it has reversed course this year to regain market share and as U.S. President Donald Trump demanded the group pump more to help keep gasoline prices lower.
OPEC+ began to unwind cuts of 2.17 million barrels per day in April with a boost of 138,000 bpd. Hikes of 411,000 bpd followed each month in May, June and July. On Saturday, the group approved a 548,000 bpd jump for August.
Mazrouei said he was not worried about supply overhang even after the latest production rises.
“You can see that even with the increases for several months we haven’t seen a major buildup in inventories, which means the market needed those barrels,” he said.
“What we want is stability and you cannot be short-sighted just by looking at the price. We need the price to be right for investments to happen,” he said, adding that countries with big oil reserves were still not investing enough.
(Reporting by Ahmad Ghaddar. Writing by Dmitry Zhdannikov. Editing by Emelia Sithole-Matarise and Mark Potter)