The United Arab Emirates isn’t buying into warnings about too much oil hitting the market. Speaking Monday, just a day after major producers agreed to freeze output hikes for early next year, the country’s energy minister said demand is holding up fine.
At the Adipec conference in Abu Dhabi, UAE Energy Minister Suhail Al Mazrouei made his position clear. “I’m not going to talk about an oversupply scenario. I can’t see that,” he said. “And I think all of what we are seeing is more demand.”
It’s the same message Saudi Aramco’s chief executive delivered last week when he dismissed concerns about a glut. But the International Energy Agency sees things differently and has projected record oversupply next year as demand growth eases while OPEC+ and others like the US, Brazil and Canada keep pumping.
OPEC+ holds back production in first quarter
Key members of the Organization of the Petroleum Exporting Countries and allies said Sunday they’re planning to pause output increases in the first quarter of 2026. There’ll be another modest hike for next month, then nothing. The first quarter normally sees weaker demand anyway, but there’s also uncertainty now with US sanctions on Russia’s two biggest oil producers.
As per Bloomberg, Oil prices for January in London were about 0.7% higher on Monday following the OPEC+ decisions. They’re down about 13% this year, though, and Wall Street firms, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., predict further losses.
Mazrouei said that looking at the longer term, there would be demand for more energy – oil, gas, and renewables – and investments are needed to maintain supply.
Hedge funds reverse course on oil pessimism
Hedge funds cut their bearish position on Brent crude by the most on record after the US imposed sanctions on Russia’s biggest oil companies. Money managers decreased short-only bets on the global benchmark by 62,078 lots to 135,790 lots in the week ended Oct. 28, according to figures from ICE Futures Europe.
The shift in sentiment comes after the US blacklisted Russian oil giants Rosneft Oil Co. PJSC and Lukoil PJSC to cut off revenue the Kremlin needs for its war in Ukraine. Traders are watching India and China closely now – they’re the top buyers of Moscow’s supplies, for clues on how the sanctions will impact global balances.
The sanctions hit at a time when global supply looks plentiful, which contributed to previous bearishness. Nations inside and outside the OPEC+ producer alliance have been ramping up output even though there are signs of cooling demand growth.
A US government shutdown has halted weekly reports on US oil positioning.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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