17 November 2018, Sweetcrude, Lagos — The Organization of the Petroleum Exporting Countries, OPEC, has said it will do “whatever” it can to adjust oversupply in the market.
The group’s president and United Arab Emirates Energy Minister Suhail Al Mazrouei, stated this during a live interview on Bloomberg TV in Abu Dhabi on Friday after supplies from the U.S reached an all-time high, flooding the market and forcing down prices.
According to Mazrouei, OPEC and its partners will either cut or adjust in line with market needs, adding that oil production is now above expectation, and that the group, more than ever, needs to change strategy.
“We have cut in the past to reach the market balance, and if we need to cut production to keep the market balanced, we will,” Al Mazrouei said. “The group will reach consensus on whatever is required to adjust the market.”
According to the International Energy Agency, IEA on Wednesday in its monthly report, crude inventories in industrialized nations have increased for four consecutive months and are set to jump by 2 million barrels a day in the first half of 2019 if current output is maintained.
Contrary to popular belief, Al Mazrouei said OPEC and its partners are not targeting a price but are seeking instead to keep crude inventories in line with their five-year average.
OPEC and its partners will meet in Vienna in December for market assessment, where many believe more strategy to balance the market will be discussed.
“In December when we meet, if there’s a requirement to curtail, whatever the required cut, we will cut in accordance to what we agree on,” Al Mazrouei said. “Whatever price that we end up with, the market will decide the price, not us.”
OPEC’s biggest producer Saudi Arabia has expressed the need for oil producers to cut 1 million barrels a day. However, a Reuters report earlier in the week quoting an anonymous source, said OPEC and its partners are looking to cut production by 1.4 million barrels per day.
Saudi Energy Minister Khalid Al-Falih had told reporters on Sunday in Abu Dhabi that the country will cut its exports by 500,000 barrels a day in December.
“OPEC and non-OPEC countries are committed to continuing to ensure that this balance that we fought very hard in the last two years to restore is sustained,” the group’s Secretary-General Mohammed Barkindo said in an interview in Abu Dhabi that underscored Al Mazrouei’s remarks. “The volatility is not in the interest of anyone, neither producers nor consumers nor the industry,” added.