The United Arab Emirates (UAE), the third largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) has expressed intention to raise its oil output next year following the allocation of increased quota under the OPEC+ agreement.
The country’s leaders said in the summer that the country would not join the Saudi Arabia on voluntary production cuts, adding that the country should be allowed to pump more than its current OPEC+ quota as it is raising its production capacity.
It would be recalled that at the June meeting of the oil cartel, the UAE secured a huge concession from OPEC+ in the form of an upward revision of its quota which is expected to raise its production up by 200,000 barrels per day (bpd) to 3.219 million bpd for 2024.
Analysts are of the view that a rise in the UAE’s oil production next year will not necessarily mean that the OPEC+ group would be pumping more supply into the global market as some of its members such as Angola are under-performing compared to their already lowered quotas.
While the UAE is set to boost its oil production in 2024, market speculation is growing that OPEC’s top producer, Saudi Arabia, will extend its voluntary cut into 2024, considering the latest slide in oil prices to $80 and the typically weak period for oil demand in the first quarter of every year.
This is even as market discussion is also intensifying that OPEC+ could announce a deeper cut at the group’s meeting in the weekend November 25-26.
According to ING strategists, Warren Patterson and Ewa Manthey, the recent slide in oil prices, “has increased noise over what OPEC+ will decide to do at its meeting on 26 November. We continue to expect that Saudi Arabia and Russia will roll over their additional voluntary cuts into early 2024.
“However, what is less clear is whether the broader OPEC+ group will make further cuts,” the analysts added.
