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OPEC's Barkindo Warns of Market Instability if Output Deal Fails
OPEC's Barkindo Warns of Market Instability if Output Deal Fails

OPEC's Barkindo Warns of Market Instability if Output Deal Fails

OPEC's Barkindo Warns of Market Instability if Output Deal Fails

OPEC’s secretary-general warned of prolonged instability in the oil market if the producer group and other major crude suppliers fail to act jointly to limit output and curb a global glut.
An inability of the Organization of Petroleum Exporting Countries to implement the deal it reached in Algiers in September will have “negative consequences on the already fragile state of the industry,” Mohammed Barkindo said at a briefing in Abu Dhabi, the UAE, Bloomberg reported.
Markets are “eagerly awaiting” combined action by OPEC and non-OPEC producers, he said.
“Failure to jointly act with our non-OPEC colleagues and friends in accordance with the Algiers accord will further elongate this period of very low growth, this period of instability in the market, and will put forward, further, the re-balancing process,” Barkindo said.
The Algiers agreement helped push oil prices to a 15-month high above $50 a barrel, but crude has subsequently fallen as several OPEC states disputed production estimates that would determine the size of cuts required of the group’s individual members. OPEC wants to put the changes into effect when it meets in Vienna on Nov 30.
The group’s internal disagreements have so far prevented a deal to secure cooperation from major non-OPEC suppliers such as Russia after rounds of talks in Vienna.
OPEC, which pumps about 40% of the world’s oil, is trying to persuade suppliers from outside the group to join the cuts. The 14-member group has held talks in the past weeks with producer nations including Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.
The goal of the Algiers agreement is to “trigger an accelerated draw-down” of oil inventories built up amid oversupply, Barkindo said.

 

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