Even though many experts have warned that oil prices substantially higher than $50 would cause US producers to ramp up production, thus contributing to the global glut and potentially compelling participants in the Organization of the Petroleum Exporting Countries' (OPEC) cutback agreement to reverse course, the United Arab Emirates says $50 "isn't going to cut it" for producers in the Arab countries.
Notably, there was a "moment of drama" at the forum when, during his keynote speech, Iraqi oil minister Jabbar al-Luaibi criticized the decisions to not allow Iraq to abstain from the production cut and to base Iraqi production figures on secondary sources rather than on self-reported ones, wrote Helima Croft, head of commodity strategy at RBC Capital Markets, who was one of the speakers at the event, in a note.
Oil prices are firming today, with the USA price up 1.3% to a recent $52.95 per barrel, and the global Brent benchmark up 1.6% to $55.98.
The ministry has set a daily average production target of 970,094 barrels.
A radically divergent opinion of market trajectory - but one as equally familiar as that of Blanch's, at least to those acquainted with Middle East rhetoric - was offered Thursday by Khalid al-Falih, energy minister for Saudi Arabia; he told delegates to the Abu Dhabi energy conference that the world may run short of oil by 2020. "Despite his forceful statement, we think Iraq's ability to fully commit will still remain subject to significant skepticism going forward". The United States Oil Fund (USO) was up 1.4% in recent trading, though it's still down as much year to date.
Additionally, several major non-OPEC producers including Russia, Mexico, and Kazakhstan also agreed to cut their production soon after.