OPEC’s secretary general Tuesday called on US shale oil producers to assist efforts to cap global oil production.
“We urge our friends in the shale basins of North America to take this shared responsibility with all the seriousness it deserves, as one of the key lessons learnt from the current, unique supply-driven cycle,” said Mohammed Barkindo, who heads the Organisation of Petroleum Exporting Countries.
He made the request while addressing delegates attending the India Energy Forum in New Delhi.
The price of Brent Crude oil was at around the $56 per barrel mark in Tuesday trading. Western Texas Intermediate Crude dipped just under $50 per barrel.
Extraordinary measure may be required
While the recent global oil glut has lessened, the level of supply and demand still isn’t quite as balanced as producers would like. OPEC member’s preferred price for oil is said to be $60 per barrel.
However, that price could still be some way off, even with the current agreement among OPEC and some non-OPEC members, to cap daily oil production levels.
“Emerging from this most vicious of all oil cycles, the need to sustain the rebalanced market in the medium- to long-term, some extra-ordinary measures could be considered by countries participating in ‘the Declaration of Cooperation’, including expanding the membership,” Barkindo said in his speech.
Oil demand recovering
While there is evidence that global demand for oil has improved during 2017 and could gain further traction in 2018, the level of supply still requires close monitoring. Not least due to rate at which US oil production has grown in recent years.
However, according to a CNBC report, Barkindo said at the India Energy Forum that OPEC and the US were already in agreement that a joint solution on the production levels of oil needed to be reached.
The current oil production cap is set to end in March 2018. Various prominent people have stated the need for the oil production cap to extended. As yet, though, no further details on if that might happen have been disclosed.