Oil prices have failed to respond to the positive signals emanating from the fifth OPEC-Russia Energy Dialogue going on in Vienna, Austria, following Iraq’s request to be exempted from the OPEC deal.
Sanusi Barkindo, secretary-general of the Organisation of Petroleum Exporting Countries (OPEC), who gave the opening remarks at the OPEC-Russia dialogue on Monday, said the discussion would foster a stable market.
“What has been evident at all the meetings, both high-level and technical, since the current series of high-level meetings began in 2012, is the fact that both of us are committed to stable and predictable markets: for the continued health of the industry and investments, for the benefit of both producers and consumers, and for the well-being of the global economy on a sustainable basis,” Barkindo said.
“We can all appreciate that market stability and balanced fundamentals remain critical issues today. Thus, today’s fifth meeting is very timely and I look forward to hearing all the viewpoints on current market developments, as well as long-term prospects.
“While there are signs that the re-balancing of the fundamentals is underway, with overall non-OPEC supply contracting this year and demand at healthy levels, the large stock overhang continues to be a major concern.”
He highlighted the progress being made via the OPEC-Russia dialogue, and the need to keep the talks alive and informed.
“We have responded to the recent market conditions with intensive talks and relentless efforts to help bring forward the realignment in global oil supply and demand,” he said.
“This bore fruit at the 170th (Extraordinary) Meeting of the OPEC Conference in Algeria in September 2016, with the landmark ‘Algiers Accord’. The consensus decision among OPEC countries has been effective in arresting any further deterioration in prices and it has helped reduce volatility.
“In addition, it has also improved overall market sentiment and strengthened the case for burden sharing and broader cooperation. We believe it is essential that producers, both OPEC and non-OPEC, look to address the issue of the stock high inventories. This is now central to the return of a balanced market and to establish sustainability.”
But Jabar Ali al-Luaibi, Iraq’s oil minister, said his country wanted to be exempted from the OPEC oil deal to cut production and stabilise price between $50 to $60 per barrel.
After al-Luaibi’s declaration, Brent crude price went down by over 30 cents to settle at the fringes of $51 per barrel. US oil also sank by over 40 cents to $50.43 a barrel.