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In line with commitments to keep global crude oil markets balanced this year and beyond, Secretary-General of OPEC, Mohammad Barkindo has hinted of factoring in the factors into calculations in the upcoming ministerial meetings.
In an interview, he said the oil cartel and partners will take the current “economic bearishness” into account with the aim of reducing oil inventories back to normal levels and revive investment in the industry
According to him, “There has also been a significant change in market sentiment, in both equity and financial markets and that has worsened many institutions’ outlook for oil demand growth.”
But there seems to be a hiccup as Russia’s Energy Minister, Alexander Novak, was quoted to have said the country is not ready to commit to further production cuts under an OPEC/non-OPEC supply accord, with the oil market facing many uncertainties in the months ahead.
Novak was of the view that “A lot depends on the market situation in the second half including sanctions and trade disputes, so today we are discussing it,” noting that “We think we need to continue to monitor the situation and see what happens in June so we can take a balanced decision in July.”
Already, the US sanctions on Iran and Venezuela are likely to tighten the market, many analysts forecast, while US-China trade tensions could dampen global oil demand.
Business Hilights recalls that OPEC and 10 non-OPEC partners, led by Russia, had agreed in December to cut a combined 1.2 million b/d in the first half of 2019. Falih has urged the coalition to extend the cuts, saying global inventories were still too high.
However, almost every member of the 24-country coalition is on board with a rollover of the agreement, except for Russia, which has been vacillating over how much production it was willing to cut, Falih said in an interview with Tass news agency
Saudi Arabia oil chief argued that “All the big producers in OPEC, as well as many non-OPEC countries like Oman, Kazakhstan, Azerbaijan have also supported the extension.”
Continuing, he added that “The remaining country to jump on board now is Russia. I will wait for the Russian dynamics to work themselves out. There is a debate obviously within the country about the exact volume that Russia should be producing in the second half.”
Though the coalition has yet to decide when it will meet to address the supply accord, OPEC originally scheduled its regular semi-annual meeting for June 25 in Vienna, with non-OPEC partners to join the talks the following day. But Russia has pushed for the dates to be changed to July 3-4, with Algeria, Iran and Kazakhstan opposed.
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