Oil prices may rise even more once investors see that OPEC and other major producers are fulfilling an agreement to cut production to curb the global glut, United Arab Emirates Oil Minister Suhail Al Mazrouei said.

OPEC is committed to the decision to reduce output and it’s too early to talk about any additional steps it may take, Al Mazrouei told reporters in Abu Dhabi. Eleven non-OPEC nations said Dec. 10 they will reduce output by 558,000 bpd, adding to a Nov. 30 OPEC pledge to cut 1.2 million starting in January.

“When the market sees the agreement is being implemented, and we hope it will be an effective agreement that will be implemented, and when they see the reduced supply in the market, I am sure this will be positive” for prices, Al Mazrouei said.

Oil rose 18% since Nov. 29. Output cuts that the Organization of Petroleum Exporting Countries and other producers agreed to may reduce swollen inventories as early as the first quarter, bringing down the surplus by about one-third, Ed Morse, head of commodity research at Citigroup Inc., said last week. OPEC has requested all members except those exempted from cuts to disclose export plans to ensure compliance with the agreement.

The UAE and other Gulf Arab nations have told their customers about plans to cut output, and all other OPEC producers who were asked to join the output deal should do the same, Al Mazrouei said.

“We call on all OPEC members that promised to cut to follow the steps of the Gulf states and the UAE and advise the markets and buyers about the percentage of the cuts that they will make,” he said.

Source: www.reuters.com