The market is still relatively in a state of balance and there is no cause for alarm.
That’s according to OPEC Secretary-General Mohammad Barkindo, who made the statements in a recent television interview with Bloomberg.
“We have met here over the weekend with the members of the joint ministerial monitoring committee of both OPEC and non-OPEC, and together with our technical experts, and we thoroughly looked at the current data as well as the projections not only by us, OPEC, but by the IEA, by the EIA from the United States and many major banks,” Barkindo told Bloomberg in the interview.
“The conclusion we all came to is that at the moment, in this quarter of 2018, the last quarter of 2018, the market is still relatively in a state of balance. There is no cause for alarm,” he added.
“The headwinds that we are beginning to see is the return of disequilibrium in the market as a result of this rise in the supplies … passing demand that may lead into resurgence, if you like, of a build up in inventories, which is not in the interest of any one of us … The decision on what to do can only be taken by the conference in December,” Barkindo continued.
Looking at the likelihood of an output cut in 2019, Wood Mackenzie’s (WoodMac) Macro Oils Vice President, Ann-Louise Hittle, said in its short-term base case, WoodMac continues to assume production restraint for next year.
“Without it, the rate of growth for supply vastly outpaces that for demand,” Hittle told Rigzone.
“The key countries involved in the decision remain committed to managing the market and are unlikely to want to face an oil price collapse next year,” Hittle added.
OPEC is scheduled to hold its 175th ordinary meeting in Vienna, Austria, on December 6.