Oil producers are succeeding in rebalancing an oversupplied market, though they may need to take further steps to sustain the recovery into next year, OPEC Secretary-General Mohammad Barkindo said.
Saudi Arabia and Russia are currently leading consultations between OPEC and other major suppliers about the future of their agreement to cut oil output, Barkindo said on Sunday in New Delhi.
The pact expires in March and oil producers are debating whether to extend it later into the year.
“There is a growing consensus that, number one, the rebalancing process is under way,” Barkindon said after meeting with Indian Minister for Petroleum and Natural Gas Dharmendra Pradhan. “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.”
Barkindo did not elaborate on any such measures.
OPEC and allied producers agreed in December last year to pare output to clear a glut and bolster oil prices. The cuts have helped revive crude, which had fallen to half its 2014 peak.
Russian President Vladimir Putin last week said Moscow is open to extending the cut deal to the end of next year.
OPEC plans to meet on Nov. 30 to assess the market and its production policy.
Brent crude, the benchmark for more than half of the world’s oil, was little changed at US$55.68 a barrel at 11:50am in Singapore. Prices fell 3.3 percent last weekend are down about 2 percent this year.
The 24 producers that agreed to pump less oil are looking forward to welcoming additional participants in the accord, Barkindo said, without identifying any possible newcomers.
“At the moment, there is no talk of an extraordinary meeting” beyond the session scheduled for next month in Vienna, he said.
United Arab Emirates Minister of Energy Suhail al-Mazrouei said he was optimistic that the next OPEC meeting would lead to a consensus between the group and its non-OPEC partners that will help balance the market in 2018, according to a tweet.
The production cuts have led to a decline in crude inventories and a better balance in the oil market, he said.
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