The Organisation of the Petroleum Exporting Countries (OPEC) has listed the challenges confronting the oil market to include uncertain prospects for the global economy; excessive speculation and the role of financial markets.

Others, the cartel noted are the impact of geopolitics; advances in technology and their impacts on exploration and production; and environmental concerns.

OPEC’s Secretary General, Mohammad Sanusi Barkindo, put these challenges forward to the 15th Ministerial Meeting of the International Energy Forum (IEF), which is due to end in Algiers, Algeria today.

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In an article submitted for inclusion in the official IEF Ministerial publication, Barkindo said it all points to the need to continually strive to develop and enhance dialogue and cooperation.

He added that there is evidently much for producers and consumers to talk about and cooperate on.

He said that the global energy system is complex and ever expanding — “one that is finely balanced and where stability must be the mantra over all timeframes.”

Barkindo added that it is essential to appreciate that the short, medium- and long-term are all interlinked.

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He noted that the importance of this can be viewed in the constant flux oil markets have found themselves in since the summer of 2014.

“It has been a period of significant instability. Oil prices now are considerably lower than in mid-2014, many investments have been deferred and some can celled, manpower has been laid off, oil supply has been greater than demand and stocks have risen considerably,” he said.

Barkindo maintaining that the market has been searching for balance, said: “While we see some signs that supply and demand fundamentals may balance themselves this year, there remains a significant stock overhang that needs to be reduced. This is now a central element to the return of a more balanced market.”

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The OPEC chief stressed that it is vital to appreciate where the additional supply has come from.

“Between 2008 and 2014 all of the supply growth of more than six million barrels a day came from non-OPEC countries, while in 2015, non-OPEC output grew by almost 1.5m bpd, for OPEC it was at around 1.1m bpd,” he added.

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