Mohammad Barkindo: OPEC Focus on Averting New Oil Glut
OPEC and its allies do not rule out taking further action at their next meeting in April should oil inventories build up in the first quarter, OPEC’s secretary general told Reuters.
Worried by a drop in oil prices and rising supplies, OPEC and non-OPEC countries such as Russia agreed in December to return to production cuts in 2019.
The producers meet on April 17-18 to review the pact.
OPEC Secretary General Mohammad Barkindo, in comments to Reuters, did not rule out more action if industrialized nation stocks continued to rise above the five-year average.
“We remain focused on the supply-demand balance,” Barkindo told Reuters TV at the World Economic Forum in Davos. “Our challenge is to maintain supply-demand balance.”
“We have seen inventories rising beyond the five-year average. A couple of months ago we have seen a deficit. We intend to ensure stocks remain within the five-year average.”
A recovery in oil prices this year will boost hopes among producers that the deal to cut supplies, which began on Jan. 1, is working. Oil has risen to above $60 a barrel, after a dip below $50 at the end of 2018.
But oil stocks in OECD nations - used as a yardstick by the producers to gauge the effectiveness of their supply cuts - were above the five-year average in November. The producers, known as OPEC+, pledged to lower output by 1.2 million barrels per day from Jan. 1. OPEC’s share is 800,000 bpd.
Barkindo said producers were making significant oil production cuts to avoid a build-up during the first quarter, and the oil market had reacted well.
source: Financial Tribune
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