Oil lead­ers meet, hop­ing mar­ket now at bot­tom

Jamaica Gleaner - - BUSINESS -

THE IN­TER­NA­TIONAL oil mar­ket has hit its bot­tom, though how long it will be there re­mains in ques­tion, lead­ers in the in­dus­try said at an Abu Dhabi con­fer­ence on Mon­day.

As they walked among stands of­fer­ing a va­ri­ety of new equip­ment, those who at­tended the an­nual Abu Dhabi In­ter­na­tional Petroleum Ex­hi­bi­tion & Con­fer­ence no doubt kept the price per bar­rel in mind, which now sits un­der US$50, down from over US$100 in mid-2014.

Oil pro­duc­ers would love to see higher prices, but OPEC so far has been un­able to cut out­put.

In Septem­ber, OPEC agreed to have a com­mit­tee look at po­ten­tially cut­ting pro­duc­tion to 32.5 mil­lion to 33 mil­lion bar­rels a day, shav­ing off 700,000 bar­rels a day — some two per cent of over­all pro­duc­tion.

That deal would need to be agreed to by OPEC mem­bers at their planned Vi­enna meet­ing later this month.

How­ever, what ef­fect that could have may be muted by US shale oil re-en­ter­ing the mar­ket. Mean­while, Iran, Saudi Ara­bia and other coun­tries have in­creased pro­duc­tion.

In Abu Dhabi, ExxonMo­bil CEO and Chair­man Rex W. Tiller­son said it sim­ply: “We don’t need any more un­cer­tainty.”

Yet, more may be on the way as OPEC Sec­re­tary Gen­eral Mo­ham­mad Sanusi Barkindo of Nige­ria warned of an un­prece­dented three-year de­cline in in­vest­ments by oil firms in ex­plo­ration and pro­duc­tion spend­ing.

Per­haps no two of­fi­cials re­flected the mar­ket tensions bet­ter than a smil­ing Emi­rati En­ergy Min­is­ter Suhail alMazroui, promis­ing the in­dus­try had seen a “sun­rise”, fol­lowed im­me­di­ately by Omani Min­is­ter of Oil and Gas Mo­hammed bin Ha­mad al-Rumhi de­scrib­ing it as “four o’clock in the af­ter­noon”.

Al-Mazroui in­sisted the oil prices would be­gin to rise again, though he ac­knowl­edged it “has been a bit long.

“We are not greedy,” he said. “We need some sort of sta­bil­ity in the price level.”

Al-Rumhi, who no­tice­ably tan­gled with al-Mazroui last year as well, said “com­mon sense has pre­vailed slowly in OPEC”. How­ever, he warned that all were “liv­ing in a dan­ger­ous place” with some of coun­tries’ Omani Min­is­ter of Oil and Gas Mo­hammed bin Ha­mad alRumhi smiles dur­ing the an­nual Abu Dhabi In­ter­na­tional Petroleum Ex­hi­bi­tion & Con­fer­ence in the United Arab Emi­rates, on Mon­day, Novem­ber 7. Those at­tend­ing the con­fer­ence this week re­main wor­ried about low global oil prices.

as­sump­tions and pro­duc­tion in­creases.

“We are play­ing with fire here,” he said. “Economies can be de­stroyed.”

“We’re in the bot­tom,” he added. “What we don’t know is, how long is that bot­tom go­ing to last.”

AP PHOTO

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