*As global economic growth forecast at 3.8% for 2017, 2018
OpeOluwani Akintayo
22 February 2018, Sweetcrude, Lagos —Commercial oil stocks in the Organisation for Economic Co-operation and Development, OECD rose in January 2018 (typical for the season) and remained 74 million barrels above the latest five-year average, representing a reduction of over 265 million barrels since January 2017, according to Mohammed Barkindo.
The Organisation of the Petroleum Exporting Countries, OPEC chief made the statement in his Keynote remark at the ongoing Nigeria International Petroleum Summit in Abuja.
OPEC and its partners, especially Russia, had held a Declaration of Cooperation to cut a combined 1.8 million barrel per day of output since January 2017 to boost oil prices.
The agreement which recorded an over 100 percent conformity, has since rallied oil price to $70 per barrel as at January this year.
Barkindo added that there are further positive signs for the global oil market, as global economic growth is forecast at 3.8% for both 2017 and 2018.
“Indeed the IMF reported in Davos at the World Economic Forum that 122 countries around the globe have registered positive economic performances”.
“Correspondingly, global oil demand growth has also been on the rise; with the 2017 forecast having been revised up to now stand at 1.6 million barrels a day”.
“For 2018, the encouraging dynamic is set to continue with a forecast of 1.6 million barrels a day”.
He added that all three benchmarks- Brent, West Texas Intermediate, and Dubai, remain in backwardation.
Despite then cleared global notion that the Declaration of Cooperation is only about the voluntary adjustments in production.
“Undoubtedly, they have been indispensable for returning a degree of stability to the oil market”.
However, the adjustments are only the “tip of the iceberg” of what the Declaration of Cooperation truly is.
According to him, the agreement is an assertion of certain principles namely: “that we are always stronger together; that there are limits to what can be achieved working alone in silos, but there are limitless possibilities to what can be accomplished by working together. When these 24 participating countries join in the concerted action, united by the common principles of equity, transparency, and fairness, they can meet any challenge”.
“The Declaration of Cooperation is also an invitation: an open invitation to all stakeholders in the energy community to join us and contribute their ideas, their know-how to achieving a sustainably stable oil market in the interests of producers, consumers and the global economy”.
“This truly is a partnership which is broad and inclusive, as demonstrated by six additional countries issuing a ‘Declaration of Support,’ at the third OPEC- Non-OPEC Ministerial Meeting in November last year, which recognized and acclaimed this contribution to oil market stability”.
He added that the testament to the Declaration of Cooperation’s durability is the fact that on a daily basis, OPEC and non-OPEC partners develop ways of institutionalizing the collaboration.
