Global oil stocks have already started falling, but they need to drop by another 270 million barrels so that OPEC can say that the oil market is coming to balance, OPEC Secretary General Mohammed Barkindo told Reuters on the sidelines of the World Economic Forum in Davos.
OPEC's main goal is to speed up the inventory drawdown, and it will continue to focus on bringing the level of drawdown near a five-year industry average, the organization's chief said.
"Stocks have already come down to below 3 billion barrels in OECD commercial stocks. The delta now is around 270 million," Barkindo told Reuters.
OPEC's latest Monthly Oil Market Report published on Wednesday said that total OECD commercial stocks fell in November 2016 to stand at 2.993 billion barrels, some 271 million barrels above the latest five-year average.
The drop in oversupply would help create an "equilibrium oil price", according to Barkindo.
OPEC and 11 non-OPEC producers, including Russia, have agreed to cut oil supply beginning January 1 in a coordinated effort to bring markets to balance and lift oil prices.
The cartel's total production dropped in December by 221,000 bpd to 33.08 million bpd, OPEC's report from yesterday showed, sending a bullish signal to the markets that supply was down from the high levels in October and November. Related: $25 Trillion Investment Needed To Meet Future Oil Demand
Further along the demand-supply narrative, OPEC raised its forecast for global crude oil demand to 95.60 million bpd-up by 1.16 million bpd from the estimated 2016 average of 94.44 million barrels daily. This is an upward revision from the previous 1.15 million bpd estimated for global daily oil demand this year.
The group said that the upward revision was prompted by a "better than expected performance" in the European and Asia-Pacific members of OECD, especially thanks to an expected increase in demand in Europe in the first quarter of this year.
By Tsvetana Paraskova for Oilprice.com
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