Oil market rebalancing story moving to next chapter
Baku, Azerbaijan, Sept.21
By Leman Zeynalova – Trend:
The oil market rebalancing story is moving to the next chapter: one where the market is already rebalancing and OPEC and its alliance could achieve higher prices but could pave the way for more US shale which will cap that rise, Paul Hickin, associate editorial director at S&P Global Platts, told Trend.
Hickin pointed out that OPEC will not want to lose the momentum as rebalancing has been slower than it would have liked, but achieving deeper cuts will be very difficult.
“Bringing Libya and Nigeria into the fold and monitoring exports as well as production are likely to be more achievable goals to provide greater credibility to the rebalancing story but even then this won’t be easy,” he believes.
The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) meeting will be held in Vienna Sept.22, during which the parties will discuss the implementation of the oil output cut deal. Libya and Nigeria, the countries which are exempt from the OPEC oil output cut deal, have also been invited to this meeting. Deeper cuts is also expected to be on the agenda.
Earlier, Iraqi oil minister Jabar al-Luaibi said that Iraq and some other oil producing countries believe that it is necessary to reduce the crude output be 1 percent more.
On May 25, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
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