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[ABU DHABI] A global oil output cut by 1.8 million barrels a day would be enough to balance the market, and Opec is ready to take further action if prices fail to stabilize, United Arab Emirates Energy Minister Suhail Al Mazrouei said. Supply and demand for crude should be balanced by mid-2017, his Nigerian counterpart Emmanuel Ibe Kachikwu said.
The Organization of Petroleum Exporting Countries decided last week to pare its collective production by 1.2 million barrels a day to counter a global glut, and non-Opec nations need to share the burden by cutting an additional 600,000 barrels a day, Mr Al Mazrouei said Wednesday.
The UAE wants oil producers outside Opec to make their commitments when the two sides meet Saturday in Vienna, he said.
If the decrease in Opec production doesn't stop prices from falling to US$40 or US$50 a barrel, "we will meet again and we will discuss with non-Opec and we will take the right measures," Mr Al Mazrouei said at a Bloomberg conference in Abu Dhabi.
Russia, which isn't in Opec, has pledged to reduce output by 300,000 barrels a day. Members of the group will discuss additional reductions on Saturday with Mexico and other suppliers.
The organisation decided to pump less oil for six months starting Jan 1 to try to support prices, which fell by about half from their 2014 peak. Benchmark Brent crude was 25 US cents higher at US$54.18 a barrel in London at 10.23am local time.
"I want to believe Russia means well and will actually deliver on the promises it's made," Mr Kachikwu, Nigeria's Minister of State for Petroleum Resources, said at the Bloomberg conference.
"Everybody sees the urgency" of meeting their obligations to pump less oil, and it would be fine for non-Opec countries to curb production by more than 600,000 barrels a day, he said.
Opec will press ahead and reduce output even if no independent producers other than Russia make cuts of their own, Mr Kachikwu said.
The oil market will be slightly oversupplied in the first half of 2017 but should be in balance by the middle or latter part of the year, the Nigerian minister said. Crude should trade next year at a per-barrel price ranging from the high US$50s to the low US$60s, he said.
Prices should rise from current levels if non-Opec producers agree to cut at the Saturday meeting, and six months of lower output should be enough to balance the market, the UAE's Mr Al Mazrouei said.
A "reasonable" crude price would provide an incentive for companies to invest in exploration and production to ensure future supply, he said.
Opec agreed on Nov 30 to reduce its collective output for the first time in eight years, reversing a Saudi-led policy of pumping without limits to defend sales against an increased supply of higher-cost output, including some from shale deposits in the US.
"Shale will come back if the price is right," Mr Al Mazrouei said.
Mr Kachikwu shared this view, saying, "Shale is always a worry".
Opec exempted Nigeria, along with Libya, from having to cut its production due to conflict in the West African nation's main oil-producing region. Nigeria is pumping 1.8 million barrels a day and could achieve daily output of 2.1 million barrels of crude and condensate by next month, Mr Kachikwu said.
The UAE produced 3.13 million barrels a day in November, according to data compiled by Bloomberg.