OPEC Urges US Shale to Take Responsibility on Output Cuts

OPEC Urges US Shale to Take Responsibility on Output CutsOPEC Urges US Shale to Take Responsibility on Output Cuts

OPEC Secretary-General Mohammed Barkindo called on US shale oil producers to help support plans to curb global oil supply on Tuesday, warning that unprecedented measures may be necessary next year to rebalance the oil market.

"We urge our friends in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle," Barkindo was quoted as saying by Reuters.

North American shale drillers have helped production soar by nearly 10% in the US this year, despite OPEC and some other producers, including Russia, cutting supplies to prop up prices.

Speaking at the India Energy Forum in New Delhi, Barkindo added that the US and OPEC had agreed they must find a joint solution to ensure oil market stability.

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming US shale production.

OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil group soon moved to curb production—along with other oil producing nations—in late 2016.

The world's largest oil producing nation, Saudi Arabia, said on Monday it had cut crude oil allocations for November by 560,000 barrels per day. The announcement appeared consistent with the kingdom's commitment to abide by an OPEC-led supply reduction agreement.

On Sunday, Barkindo had suggested that OPEC, as well as other oil producers, may be forced to adopt "some extraordinary measures" in 2018 to rebalance the market.

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