Opec sees steps for oil market stability

dubai — 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.

Saudi Arabia and Russia are currently leading consultations between the Organisation 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.

Barkindo didn’t elaborate on what those additional measures could be and if they would include the main proposal currently on the table — an extension of the existing cuts by up to nine months — or something else. 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 to clear a glut 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 November 30 to assess the market and its production policy. Brent crude, the benchmark for more than half of the world’s oil, was little changed at $55.32 a barrel by 10:43am in London. Prices fell 3.3 per cent last week, the steepest weekly drop since June, and are down about 2 per cent this year.

The 24 producers that agreed to pump less oil are looking forward to welcoming additional participants in the accord, Barkindo said, without identifying any possible newcomers.

The UAE Energy Minister Suhail bin Mohammed Faraj Al Mazroui 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, according to a tweet. The production cuts have led to a decline in crude inventories and a better balance in the oil market, he said. — Bloomberg