ABU DHABI • 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 (picture) said.
The OPEC should decide at its meeting later this month whether or not to extend the cuts, United Arab Emirates Energy Minister Suhail Al Mazrouei said in a speech at a conference in Abu Dhabi. Neighbouring Oman backs prolonging the output limits beyond March and sees producers extending them until the end of 2018, Oil Minister Mohammed Hamad Al Rumhy told reporters.
OPEC raised estimates for the amount of crude it will need to pump to meet demand next year by 400,000 barrels a day (bpd) to 33.4 million bpd, according to a monthly report yesterday from the group. As that’s about 670,000 bpd more than OPEC produced in the third quarter, global inventories would diminish further in 2018 if the group and its allies continue to keep supplies restrained. Stockpiles have declined by more than 180 million barrels this year alone, Barkindo said in Abu Dhabi.
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. OPEC will meet in Vienna on Nov 30 to review the pact on cuts, which took effect in January, and possibly extend it. — Bloomberg