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OPEC need not rush into changing oil pact: UAE

Reuters  |  ABU DHABI 

By Maha El and Rania El Gamal

(Reuters) - need not respond to a rise in prices by rushing to change a global supply-cutting pact, United Arab said on Friday.

This year's rapid rise in prices, which hit $70 this week, is backed by strong demand growth and a fall in oversupply on the back of the and non-pact, not only by political tensions, Mazroui said.

"We don't look at the price in a day and say we are in a point where we need to do changes. We need to give the market time," Mazroui, who holds the presidency, added.

"I don't think any fundamentals have changed for us to consider (a change in the output agreement) or panic... There is no need to rush and put assumptions (about) what are we going to do," Mazroui told an industry conference.

Brent crude futures traded 20 cents lower at $69.06 a barrel at 1129 GMT, after breaking above $70 on Thursday for the first time since December 2014.

Mazroui said that draining the glut needed time to bring global inventories down to the industry's five-year average.

"There is no panic," told reporters in when asked about prices at the $70 a barrel level.

Oman's minister also said on Friday he was not concerned about the current rise in prices and that he expected prices to trade within a "healthy" range of $65 to $70 a barrel for a few weeks.

Analysts and traders have warned about the risk of a price correction since the start of 2018, but they say overall market conditions remain strong, mainly due to output cuts led by the Organization of the Petroleum Exporting Countries and

In addition to the and non-production cuts of 1.8 million barrels per day (bpd) that are due to last until the end of 2018, prices have found support from eight consecutive weeks of U.S. crude inventory drops.

U.S. commercial crude stocks fell by almost 5 million barrels in the week to Jan. 5, to 419.5 million barrels. That was slightly below the five-year average of just over 420 million barrels, the target for and others cutting output.

But Fatih Birol, of the International Energy Agency, warned on Friday that while prices at $65 to $70 per barrel are good for producers now, there is a risk that such a level would encourage more oversupply from U.S. shale drillers.

Birol also said that there might be a further decline in production from member in 2018 as its economic crisis hits output.

(Reporting by Rania El Gamal, Maha El Dahan, Stanley Carvalho; editing by and Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 19:30 IST