ABU DHABI: UAE Energy Minister Suheil Al Mazrouei insisted on Thursday that oil producers can balance out supply and demand this year as they stick to a production cut deal.

“Rebalancing is continuing...all factors are positive and we are capable of achieving a balance” by end 2018, Mazrouei told CNBC Arabia television.

The minister, who is Opec president for 2018, said he expected “healthy growth in oil demand” this year as strong economic expansion across the globe continues.

He said that oil stocks have continued to decline, but insisted that “we still have another 100 million barrels left that we intend to reduce.”

The 14 members of the Opec and 10 non-members agreed in December to extend to the end of 2018 an oil cut agreement that has helped push up crude prices as they recover from a dramatic slump.

Producers have hailed the cut of 1.8 million barrels per day as a major boost for crude markets and say implementation is at 122 per cent.

Mazrouei said that it is important for Opec and non-Opec producers to continue their compliance to the deal that was first struck in 2016.

The number of producers who have joined the deal has climbed to 30 countries from 24 originally, he said.

Since the pact took effect in January 2017, oil prices − which fell to under $30 a barrel in 2016 on the back of a production glut − have now recovered to just under $70, helped by regional tensions in the Middle East.

Oil prices hit multi-year highs on Thursday despite warnings that a 13 per cent rally since early December was close to running its course.

Brent crude futures rose 27 cents to $69.47 a barrel at 1039 GMT, its highest since an intra-day spike in May 2015. US West Texas Intermediate (WTI) crude futures were at $63.94, up 37 cents to their highest since December 2014.

Sentiment was boosted by a surprise drop in US production and lower US crude inventories in official data on Wednesday.

“The undeniable fact is that (US) crude oil inventories are at their lowest level since August 2015,” said PVM Oil Associates analyst Tamas Varga. “OPEC is edging ever closer to its desired target of reducing OECD industrial stocks to the five-year average.”

Data from the US Energy Information Administration on Wednesday showed that crude inventories fell by almost 5 million barrels to 419.5 million barrels in the week to Jan. 5.

US production also fell by 290,000 barrels per day (bpd) to 9.5 million bpd, the EIA said, despite expectations of output breaking through 10 million bpd.

Reuters