OPEC officials expect the return of balance to the oil market

Economic Page
January 25, 2016 20:09

OPEC officials on Monday announced that the oil market will regain self-balance after prices tumbled to their lowest levels in 2003, in a sign that the organization will adhere to the policy of not to cut supplies unless it helps producers competitors.

Oil prices have collapsed to less than $ 28 a barrel this month from $ 100 in mid-2014 due to oversupply, and the decline accelerated after the Organization of Petroleum Exporting Countries has changed its strategy in late 2014 to defend their market share does not prices.

And it began to decline in price inhibits the development of a relatively high-cost sources of supply, such as the US shale oil and forced companies to postpone or cancel projects worth billions of dollars, which could threaten the future of some supplies.

He informed the Qatari Energy Minister Mohammed gentlemen conference in London: "We expect to see a further contraction cycle for the price of oil. But we Sntaavy, the market will regain its balance certainly because the price today will not last long in any case."

He said OPEC Secretary-General Abdullah al-Badri, speaking at the same conference, said that "there is reason to be optimistic," citing expectations of global oil demand growth in 2016 and shrinking non-OPEC supply.

He said during the conference "already see some indications of the start of self-correction of fundamental factors of supply and demand in 2016".

And yet refuses to senior producers are not members of OPEC, such as Russia to work with the organization to reduce supplies but Oman and Azerbaijan expressed an in preparation for it.

Badri He continued, "It is important to address the issue of market glut stocks .. this has become pivotal to return to a balanced market."

The price decline has damaged an income-producing countries, especially OPEC members like Venezuela who rely too heavily dependent on oil revenues and lack the ability to pump more.

Venezuela and requested an emergency meeting of OPEC to discuss steps to raise oil prices. But members of the Gulf such as Saudi Arabia who led the transformation of politics in 2014 opposed by the call for emergency meetings.

Qatari minister, whose country holds the presidency of OPEC this year and said that the request was under study, but declined to respond when asked if he supported, he said, adding "We have received a request and oil ministers discuss it .. It is under evaluation."

While the expected decline in non-OPEC supply this year, the Organization production may increase following the lifting of sanctions on Iran and Iraq plans to increase supplies in the absence of any signs of decline in Saudi production from record highs.

Iraq may increase oil production further in 2016 to up to four million barrels per day from the fields of the South, according to an Iraqi oil official said on condition of anonymity, Iraq produces about 3.7 to 3.8 million barrels per day from the southern fields in recent months.