By Stanley Carvalho and Dahlia Nehme
ABUDHABI (Reuters) – OPEC and non-OPEC producers will probably extend a deal to limit crude supply but are unlikely to deepen cuts, Oman’s energy minister said on Monday, as the United Arab Emirates said it was not worried about long-term oil demand growth.
The Organization of the Exporting Producing Countries, Russia and other oil producer allies – a group known as OPEC+ – have since January implemented an agreement to cut output by 1.2 million barrels per day until March 2020 in an attempt to boost prices. The group meets in December.
“Extension probably, cuts I think unlikely unless things happen in the next couple of weeks,” the energy minister of non-OPEC Oman, Mohammed bin Hamad al-Rumhy, told reporters at an energy conference in the United Arab Emirates capital Abu Dhabi.
He said oil demand was improving as trade tensions soften and that Oman was satisfied with current oil prices, which fell more than 1% on Monday amid concerns over the prospects of a trade deal between the United States and China.
“All indications show things are getting better, the fear of recession, the signs of agreement between the U.S. and China is positive,” Rumhy said.
Suhail al-Mazrouei, the energy minister of the UAE, the third largest producer in OPEC after Saudi Arabia and Iraq, told the conference that oil demand growth was “reasonable”.
In its 2019 World Oil Outlook, the producer group said it would supply a diminishing amount of oil in the next five years as output of U.S. shale and other rival sources expanded, despite a growing appetite for energy fed by global economic expansion.
“No one source or a group of sources will meet growth in demand,” OPEC Secretary-General Mohammad Barkindo said in a panel discussion at the Abu Dhabi conference.
He said the oil industry would have to adapt to future changes in the energy mix as global population growth raises demand outlook.
Rising climate activism in the West and widening use of alternative fuels are putting the strength of long-term oil demand under more scrutiny.
“The greener forms of energy will have a higher pace of growth but conventional oil and gas will also grow. Gas will grow more as there is a demand for cleaner forms,” Mazrouei said.
(Additional reporting by Rania El Gamal, Maha El Dahan, Ron Bousso and Nafisa Eltahir; Writing by Ghaida Ghantous; Editing by Emelia Sithole-Matarise)