Following the recent agreement by OPEC members to cut production to stabilize oil prices, the cartel on Saturday held a meeting with a number of non-OPEC nations which have committed to cut their output as well. Oil price on Monday rose to highest level since mid-2015.
Ministers from OPEC met with several Ministers from non-OPEC oil producing countries on Saturday, December 10, 2016, at the OPEC Secretariat in Vienna.
In a statement released on OPEC’s website, it has been said that the meeting on Saturday recognized the desire several non-OPEC members “to achieve oil market stability in the interest of all oil producers and consumers.”
In this regard, OPEC said, Azerbaijan, Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan have committed to reducing their respective oil production, voluntarily or through managed decline.
Speaking ahead of the meeting on Saturday Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry and President of the OPEC Conference said: “What the past two months have shown is that there is a growing consensus among producers that the market recovery process has taken far too long, with severe consequences for both producer and consumer countries. It has had a major impact on all our countries, in terms of economic growth, heavy losses in revenue and deep social spending cuts.”
He added: “It is thus vital we look to return sustainable stability to the market, in order to accelerate the ongoing drawdown of the stock overhang, bring the market rebalancing forward and ensure that the necessary future oil industry investments take place, in a timely fashion.”
The combined non-OPEC reduction target was agreed at 558,000 barrels a day for the producers above who proposed to adjust their oil production, voluntarily or through managed decline. The cuts will start from January 1, 2017, for six months, extendable for another six months, to take into account prevailing market conditions and prospects.
The deal sent Brent crude oil price rising 4.4 percent to $56 a barrel on Monday, which is, according to Reuters, the highest level in a year and a half.
Offshore Energy Today Staff