OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit

OPEC and its partners are aiming to reach a consensus on the possible extension of the production cut deal before they sit down for official talks on November 30, and a nine-month extension is a starting point for discussions, OPEC’s Secretary General Mohammad Barkindo said on Thursday.

Speaking at a briefing with reporters in London, Barkindo said that Vladimir Putin’s suggestion that the deal could be rolled over until the end of 2018 is being taken “seriously,” Reuters reports.

Earlier this month, Russia’s President Vladimir Putin said that Russia was open to extending the OPEC/non-OPEC production cut deal, but again, he echoed other officials’ comments that it was too early to decide.

“If we speak about a possible extension, then of course, it should be at least until the end of 2018,” Bloomberg quoted Putin as saying at an energy forum in Russia.

The two most influential energy ministers in the pact, Saudi Arabia’s Khalid al-Falih and Russia’s Alexander Novak “are taking cue from the open statement of President Putin and engaging the rest of the participating countries ... to build consensus before Nov. 30”, Reuters quoted Barkindo as saying.

On Wednesday, reports emerged that OPEC was favoring a nine-month extension to the OPEC/NOPEC production cut deal, which would push out the agreement until December 2018. The decision, however, may not come at the November 30 meeting, according to Reuters sources at the time.

Today, Barkindo said “It’s difficult to say at the moment what will be decided in November,” adding that Novak and al-Falih would consult and decide when the decision should be made and whether there would be another OPEC/NOPEC meeting early next year. The Saudi and Russian ministers are also currently in talks with oil producing countries not part of the present production cut deal, according to OPEC’s secretary general. 

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Earlier today, Barkindo told the Oil & Money conference in London:

“There is no doubt that the market is rebalancing at an accelerating pace; stability is steadily returning; and there is far more light at the end of the dark tunnel we have been travelling down for the past three years.”

“I have gauged the industry’s temperature. There is no doubt that we are starting to feel a warmer glow,” Barkindo said, noting that he was happy that OPEC and its non-OPEC partners had defied skeptics.

At the beginning of this year, the OECD stock overhang was at 338 million barrels above the five-year average, and now it has dropped to 159 million barrels above the five-year average in September, Barkindo said.

Referring to global oil demand in the longer term, OPEC’s chief commented:

“In our upcoming World Oil Outlook 2017, to be launched on November 7 in Vienna, we expect demand to pass 100 mb/d in 2020 and to reach over 111 mb/d by 2040. Let me stress that we see demand growing in every year of the Outlook. There is no peak oil demand for the foreseeable future.”

By Tsvetana Paraskova for Oilprice.com'

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