Oil markets have not yet reached a balance between supply and demand, UAE Minister of Energy Suhail Mohamed Faraj al-Mazroui told CNBC on Thursday. ''I have no doubt that the market needs further correction. We still have more a than 100 million barrels that needs to be taken care of,'' he stated. While the market sentiment is good, Al-Mazrouei added, the balancing of the market is a process that's going to take some time.
Commenting on the recent data showing a strong demand, he said that ''cyclic event of supply and demand is something we see every year."
In November 2017, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries led by Russia agreed to extend the output cut deal until the end of 2018. According to the deal, parties will cut oil production by 1.8 million barrels per day in order to battle oversupply caused by lower demand and soaring US shale production that have been keeping oil prices low since mid-2014. The agreement is up for review at the next OPEC meeting in June.
