10:51 AM, Oct 9, 2017 — Measures by oil producers to rebalance the market are making progress but other “extraordinary measures” may be necessary in the coming year, Mohammada Barkindo, secretary general of the Organisation of Petroleum Exporting Countries (OPEC) said on Sunday.
“There is a growing consensus that … a rebalancing process is under way. We are gradually but steadily achieving our common and noble objectives,” Barkindo said after meeting with Indian Oil Minister Dharmendra Pradhan in New Delhi, according to Reuters. “To sustain this into next year, some extraordinary measures may have to be taken in order to restore this stability on a sustainable basis going forward.”
OPEC members agreed last year to collectively lower daily output of oil by approximately 1.8 million barrels, starting January 1 2017, in a bid to support a price recovery for the commodity which had been pummeled by two years of consistent overproduction.
Barkindo said on Sunday that talks were underway to discuss prolonging the period in which the output restrictions are in place. Initially OPEC had agreed to limit production until March 2018 but Barkindo’s latest comments indicated that this extending this date could be up for discussion, according to Reuters.
“OPEC has the best poker face in town but it has bluffed us countless times before this so we’ll see if this are sincere,” Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma, told MT Newswires over the phone on Monday.
Oil production is a large component of the overall economy in some nations and to maintain economic growth or just stability they have to sell more particularly if prices are down. This has prompted past production negotiations to fail if not all crude producers agreed and stuck to specific output levels. OPEC next meets in Vienna on November 30.
The US benchmark, West Texas Intermediate crude oil, was 0.2% at $49.39 per barrel in recent trade while Brent crude, the international gauge, was up 0.1% at $55.66 per barrel.
Price: 10.00 Price Change: +0.03 Percent Change: +0.30