CAIRO - Abu Dhabi National Oil Company (ADNOC) CEO Sultan Ahmed Al Jaber said oil markets will rebalance over time amid signs they have tightened in recent weeks.
"There are signs that the market has tightened in recent weeks. The OPEC+ agreement, voluntary cuts outside OPEC+, and production shut-ins are working together to start to rebalance the market," Al Jaber said during ADNOC's 'Virtual Majlis' late on Thursday.
The company's Virtual Majlis brings together UAE government leaders and global experts to engage on the key issues facing the world and global markets.
OPEC and its allies, a group known as OPEC+, decided in April to cut output by 9.7 million barrels per day (bpd) for May and June, a record reduction, in response to a 30% drop in fuel demand worldwide caused by the coronavirus pandemic.
On Tuesday, four sources told Reuters that OPEC and its allies want to maintain the 9.7 million bpd cut beyond June, when the OPEC+ group is next due to meet.
There are reasons for cautious optimism in oil markets, Al Jaber added, though no one is in a position to predict exactly what the global economic recovery will look like and the outlook looks "unpredictable".
"This will take time. As economies begin to open up (oil)demand will follow, but the path to the next normal is not a straight line," he said.
Saudi Arabia on Monday said it would add to existing cuts by reducing output an additional 1 million bpd next month, slashing total production to 7.5 million bpd, down nearly 40% from April.
The United Arab Emirates and Kuwait also committed to slashing an extra 180,000 bpd.
ADNOC will continue to work hard to preserve its resources, and maximise profitability and is now better positioned to manage the current market dynamics, Al Jaber said.
(Reporting by Samar Hassan; writing by Dahlia Nehme; editing by Shri Navaratnam and Jason Neely) ((Samar.Hassan@thomsonreuters.com;))