Global oil market needs to be re-organized
Baku, Azerbaijan, Oct.17
By Leman Zeynalova – Trend:
Oil prices reaching $100 per barrel may be possible, but it is difficult to say considering the high degree of volatility in international trade, the US economy, and international politics, Fenner Stewart, Director of Midwest Center for Energy Law & Policy, assistant professor, University of Calgary told Trend.
He pointed out that considering the radical increases in US production in the past half-decade, a significant and sustained shortage of oil is not foreseeable.
As for the impact of the oil price volatility on the global economic growth, the expert said he doesn’t see oil as a key driver of instability in the global economy as compared to other recent events.
“Clearing the global glut of crude, which has resulted from the advent of frack oil, is a key step in the re-organization of the global oil market and ought to be a top priority regardless of other considerations,” added Stewart.
Saudi Arabia’s Energy Minister Khalid A. Al-Falih earlier said that the country’s daily oil output for October stands at 10.7 million barrels. He noted that in the case of necessity, this figure can reach 12 million barrels per day.
The minister pointed out that the uncertainty with regard to world oil supply still continues. The sanctions to be imposed on Iran starting from Nov.4 and the supply cuts from some other countries also contribute to this uncertainly, according to Al-Falih. Therefore, the minister believes it is not ruled out that oil prices can surpass $100 per barrel in 2019.
Moreover, several weeks ago, OPEC received a letter from India complaining over the current situation in the oil market, said OPEC Secretary General Mohammad Sanusi Barkindo. Addressing the briefing as part of the Oil & Money Conference, Barkindo noted that many major oil consumers are not happy with the current prices.
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