18 April 2018, Sweetcrude, Lagos – Secretary-General of the Organisation of the Petroleum Exporting Countries, OPEC, Dr. Mohammad Barkindo, says the glut in the international oil market will disappear by September, this year.
Barkindo revealed this as he stated that crude oil in storage tanks across the globe has shrunk by 357 million barrels, dropping from about 400 million barrels to 43 million barrels since the commencement of the oil cut agreement by OPEC and its allies, led by Russia, in January 2017.
“We have seen an accelerated shrinkage of stocks in storage from unparalleled highs of about 400 million barrels to about 43 million above the five-year average,” he told Reuters.
OPEC and its partners, especially Russia, in a Declaration of Cooperation, DoC, agreed to reduce output by 1.8 million barrels per day, mb/d.
“We have achieved an over 150 percent conformity level,” the OPEC secretary general added.
Addressing speculations that the pact may be extended into 2019, Barkindo said this was likely, adding that the possibility of an extension would be discussed at organisation’s next meeting in June in Vienna, Austria.
According to him, the glut will disappear by September, earlier than a previous forecast of the year-end.
“There is growing confidence that the declaration of cooperation will be extended beyond 2018,” Barkindo said and added that Russia would continue to play a leading role in the cooperation effort.
In a recent report, OPEC said its collective output, according to secondary sources, fell by 201,000 barrels per day, bpd, to 31.96mb/d in March, driven by declines in Angola, Algeria, Venezuela, Saudi Arabia and Libya.
The figure is below the 32.6mb/d the organisation has projected as demand for its crude for the whole of 2018.
Drop in output by OPEC members has helped balance booming US shale oil output, and with global demand rising by more than 1.5 percent this year, consumers are forced to drain stocks.
OPEC said last week that healthy economic growth, strong car sales, and US product consumption should help boost the global market for oil products in coming months.