Brent crude and West Texas Intermediate started the week with gains after yesterday OPEC’s Secretary General, Mohammed Barkindo, said the cartel may have to take some “extraordinary measures” to restore the oil market stability. The jump follows a 3.3-percent decline last week, the sharpest weekly fall in four months.
“There is a growing consensus that, number one, the re-balancing process is underway. Number two, 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,” the top OPEC man said without elaborating on what these measures might include, although he mentioned that OPEC would welcome more participants in the production cut deal. Barkindo was speaking at the India Energy Forum in New Delhi yesterday.
The OPEC agreement with Russia and 10 other producers to take off 1.8 million bpd from the global oil market was originally supposed to last for six months, but in May this year the partners decided to extend it until the end of March 2018. Last week, Russian President Vladimir Putin suggested the cut might be extended further, to the end of 2018.
Whatever extraordinary measures Barkindo has in mind, they won’t need to be discussed at an extraordinary meeting, apparently. “At the moment, there is no talk of an extraordinary meeting,” he told media. OPEC has a scheduled meeting for the end of next month in Vienna. Earlier reports quoted Saudi Arabia’s Energy Minister Khalid al-Falih as saying he hoped the cartel and its partners could reach a consensus on the future of the deal before that meeting.
At the moment, Russia and Saudi Arabia are consulting with the other participants on the future of the deal, but no details about the likelihood of reaching a consensus before November 30 have so far been released.
By Irina Slav for Oilprice.com
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