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10.10.2017 19:35
© Alex.ch, flickr.com
Oil producers are succeeding in re-balancing an oversupplied market, though they may need to take further steps to sustain the recovery into 2018, OPEC Secretary-General Mohammad Barkindo said, Bloomberg reported.
Saudi Arabia and Russia are currently leading consultations between the Organization of Petroleum Exporting Countries and other major suppliers about the future of their agreement to cut oil output, Barkindo said Sunday in New Delhi. The pact expires in March, and oil producers are debating whether to extend it later into the year. “There is a growing consensus that the re-balancing process is underway,” he said.
Venezuela has suggested making deeper cuts, but that’s considered unlikely given the political challenges of getting all members to agree unanimously.
OPEC and allied producers agreed in December to pare output and bolster oil prices. The cuts have helped revive crude, which had fallen to half its 2014 peak. Russian President Vladimir Putin last week said the country is open to extending the cut deal to the end of 2018. OPEC plans to meet on Nov. 30 to assess the market and its production policy.
United Arab Emirates Energy Minister Suhail Al Mazrouei said he’s optimistic that the next OPEC meeting will lead to a consensus between the group and its non-OPEC partners that will help balance the market in 2018. The production cuts have led to a decline in crude inventories and a better balance in the oil market, he said. The 24 producers that agreed to pump less oil are looking forward to welcoming additional participants in the accord.
State-run Saudi Arabian Oil Co., known as Aramco, will make a cut of 560,000 barrels a day in its allocations to customers next month, the Saudi energy ministry said in a statement. Aramco plans to supply 7.15 million barrels a day “despite very strong demand” that exceeds 7.7 million barrels a day, it said. “The kingdom expects all other participants in the effort.”
Lower compliance with the curbs promised by some nations combined with rising production in OPEC members Libya and Nigeria -- both exempt from reducing output due to their internal strife -- have added pressure on Saudi Arabia to make deeper cuts of its own.
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