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OPEC could consider more oil cuts–Barkindo

OPEC could consider more oil cuts–Barkindo

Mubasher: Further cut in oil supplies is among options for the Organization of the Petroleum Exporting Countries (OPEC) and its allies to be weighed in a planned meeting next December, Reuters cited the group’s head as saying.

The producer club and other non-affiliated producers, including Russia, an alliance known as OPEC+, have since last January by 1.2 million barrels per day (bpd) to keep market on an even keel.

The deal expires in March next year, while producers are due to meet on 5 and 6 December to discuss production policy.

“The conference will take appropriate, strong, positive decisions that will set us on the path of heightened and sustained stability for 2020,” OPEC’s secretary general Mohammad Barkindo was quoted by Reuters as saying on the sidelines of the annual Oil & Money conference.

Oil prices could not maintain a lasting boost from supply shortages this year, including the disruption caused by an attack on Saudi Arabian crude processing facilities in mid-September, which knocked out more than half of its production.

“As we approach December, we will be faced with real data for 2020 which will enable us to probably review the current arrangement and come up with a decision that probably will cover the whole of the year,” Barkindo was quoted by the news agency.

In its monthly oil market report, OPEC lowered its forecast for global economic growth to 3% from 3.1%.

However, Barkindo struck a more optimistic tone, stating that figures pertaining next year were preliminary and could be surprising to the upside.

In the global demand outlook, the producer group demand for OPEC barrels next year could drop next year, due to higher supply from rivals such as the US.

Global demand for OPEC output will average 29.6 million bpd, 1.2 million bpd lower than this year.

Non-OPEC supply growth will accelerate at 2.2 million bpd, even with a downward revision in OPEC’s monthly report.

By 2:36 pm GMT, US Nymex crude futures jumped by 0.99% to $53.11 per barrel (pb), while international benchmark Brent futures rose by 0.48% to $58.60 pb.