EMEA News
OPEC Resumes Self-Congratulatory Stance as Azerbaijan's Output Rises
It seems the Organization of the Petroleum Exporting Countries' (OPEC) recent lapse from its normal self-congratulatory mode to expressing worry about being able to reduce the global glut of crude was temporary: Mohammed Barkindo, the cartel's secretary-general, boasted on Tuesday that compliance with the oil output cut deal between OPEC and non-OPEC nations is extremely high, and that he anticipates strengthening cooperation with Russia.
Visiting Moscow for an energy conference, Barkindo also told media he expects all 24 OPEC and non-OPEC nations participating in the cartel's crude cutback initiative to take part in OPEC's next official conference, in November.
But once again, the secretary-general's feel good message is undermined by developments to the contrary: it was also revealed on Tuesday that Azerbaijan's oil output totaled 785,700 barrels per day (bpd) in September, up from 734,800 bpd; while this is still within the limit agreed to under the OPEC cutbacks, it demonstrates that members are doing their utmost to push the limits of the agreement - which in turn throws into question their enthusiasm for participating in an extended round of cutbacks beyond the March 2018 expiry date.
Even news that mitigates that crude gain casts OPEC in an unfavourable light inasmuch as it reinforces the notion that the cartel's current effect on the market overall is negligible: Libya's oil production slumped to a five-month low, to 750,000 bpd from 985,000 bpd, after an armed group forced workers at the Sharara field to stop pumping.
OPEC had agreed in November to let Libya and Nigeria pump without restrictions, due to their internal strife; output for Libya had reached a four-year high in July before shutdowns at various fields stalled the recovery.
Last week, OPEC members broke from tradition by complaining that crude prices likely wouldn't rise due to persistent overproduction, with one source declaring that "a range of $50-$55 is good, you don't want to see prices rising to $60 or higher because ten it will bring in more [U.S.] shale."
