The oil market is on its way to rebalancing, and the 1.2 million barrels per day in supply cuts by OPEC and its allies will be enough to finish the job in the first half of this year, UAE Energy Minister Suhail al-Mazrouei said Wednesday.
"We have seen the correction in December, in January definitely we will continue correcting the market," Mazrouei said in Abu Dhabi, Platts reported.
OPEC crude output fell 630,000 bpd in December to a six-month low of 32.43 million bpd, according to the latest S&P Global Platts OPEC production survey released Tuesday.
But the 11 members who have quotas for 2019 still need to reduce supplies by 950,000 bpd to become fully compliant with the deal, which went into force January 1.
Mazrouei, who served as OPEC's president in 2018, noted that even though the agreement exempts sanctions-hit Iran and Venezuela, he expected output declines in both countries will factor into OPEC's market rebalancing efforts.
The deal also exempts Libya, whose production has been volatile due to disruption by militants.
Mazrouei added that the US may need to recalibrate its position on oil prices if it wants to maintain a healthy economy. OPEC has been under pressure from US President Donald Trump to keep prices low by pumping more crude, but Mazrouei said US producers would suffer.
"Low prices [are] not good for the US economy," Mazrouei said, adding that growth in shale production "is not going to happen if the price is not right. We have seen slowdown in the US in the last month. Investors are not going to be keen on [low prices] in the US because they will be losing money."