OPEC Secretary General Mohammad Barkindo said in a statement that global crude-producing countries will decide in May whether to extend their collective output cuts beyond the first half, while the global oil inventories are expected to start to fall by the second quarter of 2017.
“We have our target in accelerating those draw-downs to bring them closer to the five-year level – that is our target,” Barkindo told reporters today at an energy conference in Abu Dhabi. “The Organisation of Petroleum Exporting Countries isn’t targeting a specific price for crude”, he added.
Barkindo also said that global macroeconomic numbers have responded positively to the agreement between OPEC and non-OPEC producers. The agreement is to trim output in a drive to end a worldwide supply cut. The OPEC’s November 30th decision however, reversed the group’s policy of pumping without limits, and other major producers including Russia have promised cuts of their own in a joint effort to support prices, and thus making the benchmark Brent crude 37 cents higher at $55.47 a barrel in London at 9:18 am local time.
The cuts (which began on the 1st of January) is expected to stay until June. The United Arab Emirates Energy Minister Suhail Al Mazrouei said at the Atlantic Council Global Energy Forum in Abu Dhabi that Oil markets should be in balance in six months, and it’s premature to decide whether additional cuts will be needed. However, countries with a naturally declining output of oil are contributing to a decrease in global production.
Total SA Chief Executive Officer, Patrick Pouyanne (speaking at the same event) said he envisions that the decline in oil inventories will take two years.
A committee of OPEC and non-OPEC producers would be set up, with Kuwait as chairman, and includes Algeria, Venezuela, Russia and Oman.