By Oge Obi
The Organisation of Petroleum Exporting Countries (OPEC) Secretary General, HE Mohammad Sanusi Barkindo has said that against skeptics disbelief on its December 2016 Declaration of Cooperation agreement has not only yielded the desired result but has brought about an accelerating stability in the global oil market.
Speaking at the 38th annual Oil & Money conference in London, yesterday, the OPEC Secretary-General said that the current oil market outlook and beyond offers hope for a stabilized oil market. He noted that the production cut agreement by the 24 OPEC and Non-OPEC member countries has brought the reduction in the global oil glut to half. A development he said would lead to the end of the journey into a dark tunnel OPEC has been travelling in the past three years.
Recollecting the disbelief that greeted the 24 oil producing nations’ market rebalancing bid in 2016, said, “We were greeted with skeptism – we heard stories of OPEC’s often weak conformity to past production adjustments, and the lack of past support from non-OPEC nations.
“I am happy to stand here today and say that those skeptics were mistaken. There has been a massive drainage of oil tanks across all regions, in terms of both crude and products. A balanced oil market is now fully in sight, Barkindo declared.
Barkindo disclosed that the oil inventory surplus in industrialized nations compared with the five-year average has fallen below 160 million barrels, less than half the level at the start of the year. And that a stronger demand means that decline has accelerated since May.
“I have gauged the industry’s temperature. There is no doubt that we are starting to feel a warmer glow. There is now more talk of a brighter outlook. It is a feeling that has been missing from the industry for far too long.
“This positivity is underscored by recent data. For 2018, this positive trend is set to continue with a healthy growth forecast of 3.5%.
“While the process has not always been smooth given the severity of this cycle, I believe that if we look back over the past nine months or so we can be happy with our collective efforts to overcome the challenges of the current oil market cycle.
“There is no doubt that the market is rebalancing at an accelerating pace; stability is steadily returning; and there is far more light at the end of the dark tunnel we have been travelling down for the past three years, Barkindo said.