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OPEC calls on non-cartel states to address oil stock overhang

Oil&Gas Materials 25 January 2016 14:35 (UTC +04:00)
It is vital the oil market addresses the issue of the stock overhang, and once this overhang starts falling then prices start to rise, OPEC Secretary-General Abdullah al-Badri said at Chatham House’s ‘MENA Energy’ conference in London.
OPEC calls on non-cartel states to address oil stock overhang

Baku, Azerbaijan, Jan. 25

By Aygun Badalova - Trend:

It is vital the oil market addresses the issue of the stock overhang, and once this overhang starts falling then prices start to rise, OPEC Secretary-General Abdullah al-Badri said at Chatham House's 'MENA Energy' conference in London.

"Given how this developed, it should be viewed as something OPEC and non-OPEC tackle together," al-Badri said.

"Yes, OPEC provided some of the additional supply last year, but the majority of this has come from Non-OPEC countries," he added.

He stressed that it is crucial that all major producers sit down to come up with a solution to this.

" The market needs to see inventories come down to levels that allow prices to recover and investments to return," he said.

"This is not only crucial for producers, but consumers too. The world desires more oil, and this means more investment," he added.

Al-Badri said that in 2015 oil production growth was observed both in OPEC and non-OPEC countries. Non-OPEC grew by slightly over 1.2 million barrels a day, and OPEC at around 1 million barrels a day, according to al-Badri.

"It is important to recall that the previous high oil-price cycle was the outcome of a lack of investment in more supply. And the low oil-price environment we find ourselves in today is the result of too much investment in high-cost production during that previous period," al-Badri said.

He stressed the confidence that the industry will come through this current cycle. Market forces, as well as cooperation among producers, will eventually lead to the return of stability, he said.

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