Opec ‘optimistic’ of output cuts
abu dhabi — Oil-exporting group Opec is confident that production cuts agreed with nonmembers to prop up prices will lead to a recovery in the market, its chief said on Wednesday.
Opec secretary-general Mohammed Sanusi Barkindo said the oil markets are on recovery path thanks to united efforts taken by Opec and non-Opec members.
“We are optimistic that the policy measures we have taken already place us on the path of recovery,” Barkindo said at an energy forum in Abu Dhabi.
Opec members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year. Some non-Opec producers, led by Russia, joined in December by committing to cut output by 558 million bpd.
Barkindo did not take a position on whether oil ministers from participating countries would extend the cuts when they meet in Vienna next month.
“These 24 countries, I believe, will take a decision that will be in the best interest of not only producers but also consumers and the global industry in general,” he said.
Opec will decide at a meeting on May 25 whether to prolong the cuts it pledged to make starting in January, he said.
“We have turned a new page in the history of oil,” he said during the third Petroleum Media Forum held in Abu Dhabi on Wednesday.
Barkindo said last year saw steps being taken to correct imbalances in the international oil markets.
“From January 1, the Opec and non-Opec nations have begun the implementation of production adjustments totalling around 1.8 million barrels per day. Last two years were torrid for all in the industry.”
He, however, remained optimistic that policy measures initiated
These 24 countries will take a decision that will be in the best interest of not only producers but also consumers and the global industry in general
Mohammed Barkindo, Opec secretary-general
will lead to path of recovery. “The results of compliance [by Opec and non-Opec nations] were beyond expectations.”
In February, conformity to adjustments stood at above 94 per cent and March data is showing a better figure.
“This underlines our commitment to our common objectives. I am confident, our collective action will continue to prove effective and bring us the results we are seeking. Of course, all GCC members are actively spearheading these efforts.”
Barkindo said the effects of oil market downturn are still lingering across the world. However, the “future isn’t bright but assured for the GCC”. He hailed the “deep knowledge and skills” of UAE Energy Minister Suhail bin Mohammed Faraj Al Mazroui in solving complex issues during previous sessions in Algiers and Vienna.
“The market is correcting itself. So far, we have not seen huge fluctuation in the price, which is a good thing,” he said. “We want stability in the market,” he added.
Oil prices have dropped by around half since 2014 and currently hover just above $50 per barrel.
Opec exempted Nigeria and Libya from cutting production. The group agreed to let Iran pump an additional 90,000 barrels a day to reach output of about 3.8 million.
Iran will probably be allowed to keep production unchanged if Opec decides to extend its limits beyond the first half of the year, Kuwaiti Oil Minister Issam Almarzooq said. — With inputs from AFP,
Bloomberg