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  • Apr 28th, 2017
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Global energy markets are moving in the right direction after oil prices fell to historic lows due to oversupply, Qatar's energy minister said Thursday, praising Opec members for their adherence to a "successful" November deal to cut production. Minister of Energy and Industry Mohammed Saleh Abdullah Al-Sada told the Atlantic Council summit in Istanbul that a decade of high oil prices had led to a dangerous oversupply, price falls and now an "unprecedented shrinkage" in investment.

But in a unusual move, Opec members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to shore up prices. The move was also partly matched by non-cartel producers led by Russia and the critical question is whether Opec will take new action at its next meeting on May 25.

"A balancing was bound to happen. What we want to do is to hasten that process of balancing," said Al-Sada. Speaking in Paris, Opec's Secretary General Mohammed Barkindo said he was "confident" that a consensus was building among cartel countries and non-members on maintaining the agreement at the May talks.

"It takes time because of the number involved - 24 countries - every country has an important role to play," he said. Al-Sada hailed the fact that compliance to the November agreement has been almost 98 percent including all participants and had sometimes been over 100 percent among Opec members, meaning they had exceeded the output cuts demanded.

Compliance has historically been a problem within Opec and Al-Sada said that adherence to past agreements had been on average only 70 percent. "The agreement was very successful and it helped the process of rebalancing," he said. "It (the market) is picking up. We hope to get a more accelerated balancing process in the second half of the year."

The energy minister of Opec kingpin Saudi Arabia Khalid al-Falih said earlier this month that the output cuts might have to be prolonged in order to achieve the desired rebalancing of the market. Without directly echoing his Saudi counterpart's comments, Al-Sada said the rebalancing was coming but would still take time. "The market today is well supplied and will be for the next years.

Copyright Agence France-Presse, 2017


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