Mohammad Sanusi Barkindo, the OPEC (Organization of the Petroleum Exporting Countries) Secretary General was present at CERAWeek and on being asked about his opinion on “will the OPEC and non-OPEC producers extend their production cuts after May”, he refused to comment saying – “That’s very premature at the moment…That’s a long time in this market.”
CERAWeek, an annual energy conference that is organised by IHS, an information and insights company in Houston starts today. It is a platform where senior energy executives and innovators come together to discuss the energy future of the world.
Last year, OPEC countries along with Russia and few others have agreed to cut down production by 1.8 million barrels a day as the prices of crude were on a southbound journey. This helped to stabilise the production above $50 per barrel, although UAE and Iraq were not successful in keeping up the targets. Also, there was increased production from the US, which was not a party to any such deal.
Barkindo expects that all the members of the deal will keep up with their commitments. He was also asked about the rebalancing of the market in light of huge inventory pile up from the US. He replied, “It depends who you talk to and it depends on what inventories you are looking at. But overall, I think so far, so good. Inventories are responding if you look at both onshore and offshore inventories.”
Many speakers, including the oil ministers from Iraq, Saudi Arabia and Russia, will speak at CERAWeek and the oil industry is looking forward to getting cues from there. Next OPEC meeting is scheduled in May, but before that, the monitoring committee will meet in Kuwait on 25th march.
OPEC expects the members of the Vienna deal must have performed better in decreasing oil output last month as compared to January figures. This is because the deal was done in December and January being the first month everyone was struggling to meet the commitments however they achieved 86-percent conformity.
U.S. shale drillers, on the other hand, are producing 9 million barrels per day if we see the U.S. government’s last week data. Barkindo said that he met the shale producers of the US just before this CERAWeek meeting and they appreciated the efforts that both OPEC and non-OPEC members are making to keep the cost of the crude stable.