OPEC Chief Assures Markets That Oil Prices Won’t Crash Again

The OPEC+ group will look to ensure that prices do not plummet again as they did in the spring, OPEC’s Secretary General Mohammad Barkindo said on the Energy Intelligence Forum on Thursday.

“I want to assure you that the OPEC, non-OPEC partnership will continue to do what it knows best, by ensuring that we don’t relapse into this almost historic plunge that we saw,” Barkindo said, replying to a question whether the market could handle another 2 million barrels per day (bpd) if OPEC+ further relaxes the current cuts in January as planned.

OPEC+ believes that the worst of the crisis is behind us, but the recovery is going slower than expected earlier this year, with demand still struggling, OPEC’s chief said at the forum. 

Keeping market stability is the top priority of the OPEC+ agreement, but “We have no illusions this recovery will take a long time,” Barkindo added.

OPEC is optimistic, however, in the recovery next year, expecting a strong rebound in global economy, the head of the cartel said, noting that “We have no doubt a vaccine will be available next year.”  

Earlier this week, Russia and the United Arab Emirates (UAE) expressed views that OPEC+ would be able to ease the cuts as of January, as planned.  

The alliance is optimistic that it will be able to gradually ease the production cuts from January, despite surging coronavirus cases in many countries, Russia’s Energy Minister Alexander Novak said.

“Currently, despite the second wave of the pandemic in a number of countries, my colleagues and I continue to be optimistic and expect we can gradually raise production as per the agreement without harming the market,” Novak said in an article in the energy ministry’s magazine Energy Policy.

UAE’s Energy Minister Suhail al-Mazrouei said also said this week that the alliance plans to ease the cuts as of January.

“We believe that this is the calculated volume to cater for the demand coming back,” al-Mazrouei said.

By Tsvetana Paraskova

Gh Extractives

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