UAE: UAE crude output remains weak in March; Brent prices gain ground
Brent crude oil prices averaged USD 84.96 per barrel in March, up 3.9% from February. On 29 March, the commodity traded at USD 87.42 per barrel, up 4.3% from 29 February. Supply cuts by OPEC+ and robust demand drove up prices.
Turning to production, for the third month running, in March UAE oil output clocked in at 2.93 mbpd (million barrels per day), remaining at one of the lowest levels since late 2021.
After falling last year, crude output is projected to drop further this year, but less sharply. On the one hand, an agreement with OPEC+ reached in June 2023 will boost the country’s 2024 quota by 0.20 mbpd. On the other hand, the UAE committed on 30 November to reduce output by 0.16 mbpd in Q1, and extended this cut to end-Q2 in March, hitting oil output.
On the outlook for oil prices, analysts at Desjardins said:
“[OPEC+] has extended its cuts to the second quarter, contributing to the recent run-up in prices. Another factor driving up prices is the resilience of the world’s economies, especially in the United States, which is supporting demand. Under these circumstances, and with economic growth expected to pick up in the second half of the year, we believe the price of WTI will gradually inch up to approximately US$85 per barrel by the end of 2024.”