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Saudis, UAE Signal OPEC+ Will Resist U.S. Calls For More Oil

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(Bloomberg) -- Saudi Arabia and the United Arab Emirates signaled OPEC+ will continue raising oil output cautiously and won’t bow to U.S. pressure to pump faster.

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President Joe Biden, concerned that gasoline prices at a seven-year high are stoking inflation in America, has called on the 23-nation alliance to turn on the taps and bring down crude prices.

OPEC+, led by Saudi Arabia and Russia, is currently increasing daily output by 400,000 barrels per month.

“That should be enough,” UAE Energy Minister Suhail Al Mazrouei said in an interview in Abu Dhabi, where he’s attending the Adipec oil and gas conference.

The Organization of Petroleum Exporting Countries and partners next meet on Dec. 2. Crude prices have climbed around 60% this year to more than $80 a barrel, with several energy executives and leaders such as Vladimir Putin saying they could get to $100.

Mazrouei said the oil market will switch from a supply deficit to a surplus early next year and that’s one of the main reasons for OPEC+ not to be more aggressive.

“All what we know and what all the experts in the world are saying is that we will have a surplus,” he said. “So we need not panic. We need to be calm.”

His comments were echoed by Saudi Energy Minister Abdulaziz bin Salman.

Oil inventories have fallen rapidly since OPEC+ began deep supply cuts in early 2020, at the onset of the coronavirus pandemic. They’ll begin to rise again from next month, Prince Abdulaziz said.

“OPEC+ is fulfilling its duty,” he said in a separate interview at Adipec.

Neither minister said whether the forecasts would change if several members continue to pump below their targets. The group only managed to raise supply by around 250,000 barrels a day in October, mainly because Nigeria and Angola are struggling amid a lack of investment in exploration and development.

The Saudi minister isn’t worried about the U.S. potentially selling down crude from its Strategic Petroleum Reserve to force prices down.

“You should ask them about it,” he said. “It’s not my priority today to worry about something that has not happened.”

The prince said oil markets were calm relative to those for coal and natural gas, prices for which soared to record highs last month.

“The oil market is not responsible for energy shortages,” Prince Abdulaziz said. “Compare us to every other source of energy. Volatility is coming from the other sources of energy. There’s way much more volatility.”

Oman’s energy minister also said there was no need for OPEC+ to accelerate its production increases. The group will probably decide at its December meeting to stick with monthly hikes of 400,000 barrels, Mohammed Al-Rumhy said.

(Updates with comments on U.S. strategic reserves.)

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