UAE: UAE crude output stays soft in April; Brent prices rise further

UAE Commodities April 2024

UAE: UAE crude output stays soft in April; Brent prices rise further

Brent crude oil prices averaged USD 88.97 per barrel in April, up 4.7% from March. On 30 April, the commodity traded at USD 87.91 per barrel, up 0.6% from 29 March. Rising tensions between Iran and Israel pushed up prices.

Turning to production, in April, UAE oil output was stable at March’s 2.93 mbpd (million barrels per day), remaining at one of the lowest levels since late 2021.

After declining in 2023, crude output is seen remaining downbeat this year. On the one hand, an agreement with OPEC+ reached in June 2023 will raise 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 and to end-Q3 in June, knocking oil output.

In other news, on 2 June, OPEC+ said it would allow the UAE to gradually raise its output in 2025 by 0.3 mbpd, boding well for oil production in that year.

On the outlook, EIU analysts commented:

“ADNOC will front-load implementation of its oilfield expansion programme while oil prices remain relatively high, with development activity expected to remain intense throughout 2024-25 (stimulating the local oilfield services and manufacturing sectors) before slowing as prices fall. The trajectory of production will be steadily upwards from 2025, determined chiefly by the pace at which OPEC+ curbs are eased and other external market considerations.”

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