OPEC urges U.S. to cut shale pro­duc­tion

Tehran Times - - ENERGY -

OPEC Gen­eral Sec­re­tary, Mo­hammed Barkindo, called on U.S. shale oil pro­duc­ers to help sup­port plans to curb global oil sup­ply on Tues­day, warn­ing that un­prece­dented mea­sures may be nec­es­sary next year in or­der to re­bal­ance the oil mar­ket.

“We urge our friends, in the shale basins of North Amer­ica to take this shared re­spon­si­bil­ity with all se­ri­ous­ness it de­serves, as one of the key lessons learnt from the cur­rent unique sup­ply-driven cy­cle,” Barkindo said.

North American shale drillers have helped pro­duc­tion soar by nearly 10 per­cent in the U.S. this year, ac­cord­ing to Reuters, de­spite OPEC and some other pro­duc­ers — in­clud­ing Rus­sia — cut­ting sup­plies in a bid to prop up prices.

Speak­ing at the In­dia En­ergy Fo­rum in New Delhi, Barkindo added that the U.S. and OPEC had agreed they must find a joint so­lu­tion in or­der to en­sure sta­bil­ity in the oil mar­ket.

The price of oil col­lapsed from near $120 a bar­rel in June 2014 due to weak de­mand, a strong dol­lar and boom­ing U.S. shale pro­duc­tion. OPEC’s re­luc­tance to cut out­put was also seen as a key rea­son be­hind the fall. But, the oil car­tel soon moved to curb pro­duc­tion — along with other oil pro­duc­ing na­tions - in late 2016.

Mean­time, the world’s largest oil pro­duc­ing na­tion and OPEC king­pin, Saudi Ara­bia, said Mon­day it had cut crude oil al­lo­ca­tions for Novem­ber by 560,000 bar­rels per day. The announcement ap­peared con­sis­tent with the king­dom’s com­mit­ment to abide by an OPEC-led sup­ply re­duc­tion agree­ment.

On Sun­day, Barkindo had sug­gested that OPEC, as well as other oil pro­duc­ers, may be forced to adopt “some ex­tra­or­di­nary mea­sures” in 2018 in or­der to re­bal­ance the mar­ket.

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