OPEC head says oil cuts only viable option to a steady market

Abu Dhabi, UAE - The oil market is re-balancing at a quickening pace and production cuts are the ‘only viable option’ to restore stability, OPEC secretary general Mohammad Barkindo said.

Global curbs on output have helped trim crude inventories from record levels, the UAE Energy Minister Suhail al Mazrouei said in a speech at a conference in Abu Dhabi.

Oman backs an extension in the cuts accord that expires in March and sees producers prolonging their limits until the end of 2018, H E Dr Mohammed bin Hamed al Rumhi, Minister of Oil and Gas told reporters.

OPEC on Monday boosted forecasts of demand for its crude in 2018, signaling that the rebalancing of the global market could gather pace. The Organization of Petroleum Exporting Countries raised estimates for the amount it will need to pump to meet demand next year by 400,000 bar- rels a day to 33.4mn a day, according to a monthly report from the group.

Output cuts by OPEC and other producers such as Russia and Oman have started to pay off, with Brent crude prices trading close to a two-year high.

“We are seeing clear indications that the market is re-balancing at an accelerating pace and stability is steadily returning,” Barkindo said on Monday. “I am certain that if we had not mobilised ourselves when we did, building consensus and jointly taking action in responding to the crisis, the industry would be in worse condition than it is today.”

Oman expects crude to stay above US$60 a barrel and sees stable prices next year, H E Rumhi said in an interview.

Global production curbs are the ‘only viable option’ to restore stability in the oil market, Barkindo said.