OPEC secretary general Mohammad Sanusi Barkindo on Monday said that the global oil market is steadily returning to balance as indicated by decline in OECD commercial oil inventories, which fell to 140 million barrels above the five-year average in October.
“Excess crude in floating storage has been drawn down considerably, by 50 million barrels since June 2017, supported by the shift in the market structure where for the first time since the summer of 2014, all major crude oil benchmarks have flipped into backwardation, signaling clearly a market that is steadily returning to balance,” Barkindo said during his welcome address at the technical meeting of OPEC and non-OPEC countries.
Talking about the compliance to the output deal, under which OPEC and its non-member partners agreed to cut supply by a combined 1.8 million barrels per day, Barkindo said that the average conformity to the agreement has been over 100 percent since the implementation on January 1.
The Organization of Petroleum Exporting Countries (OPEC) and other major non-member producers are scheduled to meet in Vienna this week to assess the market and possibly decide on the output cap deal that expires March 2018.
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