UAE will not cut production in 2024
OPEC's third-largest producer, the United Arab Emirates (UAE), may increase its oil production next year as it got a higher share under the OPEC+ deal.
The United Arab Emirates, OPEC's third-largest producer after Saudi Arabia and Iraq, said in the summer that it would not join the Saudis in making voluntary production cuts.
The UAE has argued for years that it should be allowed to pump more than its current OPEC+ quota as it ramps up its production capacity.
At the June meeting, the UAE got a huge concession from OPEC+ in the form of an upward revision of its quota which will see its production increase by 200,000 barrels per day (bpd) to 3.219 million barrels per day by 2024 .
An increase in UAE oil production next year doesn't necessarily mean the OPEC+ group will pump more: some members like Angola are underperforming relative to their already reduced shares. So, more than anything, the production of the Emirates will replace that of countries that are unable to perform adequately.
As the UAE is set to increase oil production in 2024, market speculation is growing that OPEC's top producer, Saudi Arabia, will extend its voluntary cut until 2024, considering the latest decline in oil prices at $80 and the typically weak period for oil demand. in the first quarter of each year. Market chatter is also intensifying that OPEC+ may announce a deeper cut at the group's weekend meeting on November 25-26.
The recent weakness in oil prices “has increased speculation about what OPEC+ will decide to do at its November 26 meeting. We continue to expect Saudi Arabia and Russia to renew their further voluntary cuts in early 2024,” ING strategists Warren Patterson and Ewa Manthey wrote on Monday.
“However, what is less clear is whether the broader OPEC+ group will make further cuts,” they added.
A deeper group cut, combined with the voluntary rollover of Saudis and Russians, would erase the market surplus currently forecast in the first quarter of 2024, the strategists noted. At the same time we must follow what countries that are not part of OPEC, such as Brazil, Guyana, Suriname and Argentina, will do. We can certainly expect, in the medium term, a greater exploitation of Argentine deposits, with the desire of the new president Milei to sell the state oil company YPF.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gli-emirati-arabi-uniti-non-taglieranno-la-produzione-nel-2024/ on Tue, 21 Nov 2023 07:00:24 +0000.