Head of commodities at Saxo Bank, Ole Hansen said: “Opec will want to see numbers from Russian Federation, not just promises”.
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Mr el Badri set out how a surge in production had sent the “overhang” or extra supply of oil supply in world markets to 260 million barrels at the end of past year, up from a negative level of 85 million in 2013.
“Yes, Opec provided some of the additional supply past year, but the majority of this has come from non-Opec countries”. A study by IHS found that investment for the years from 2015 to 2020 has been slashed by $1.8 trillion, compared to what was planned in 2014.
“This should be finalised and we should hear some solid suggestions coming from all parts, from OPEC and non-OPEC, at least from OPEC”, the minister said.
“The lack of a regulator – the role played before by OPEC – which balanced oil prices and gave a long-term perspective, has resulted in the market being handed over to short-term positions”, he said in his remarks.
The Qatari minister, whose country holds OPEC’s rotating presidency this year, said the request was being considered although he declined to say if he was in favor.
“We can see some flexibility. If they reduce then the United States will continue at full force”. At the time of the London market close, Brent crude was trading at $30.71 after Iraq announced it was planning on increasing its production to record levels.
Russia, not a member of Opec, could work with the group on trimming supply if a political decision was taken to cooperate, Leonid Fedun, vice president of Moscow-based oil company Lukoil PJSC, said in an interview with state news agency Tass.
“Saudi Arabia is well documented to be the clear lowest cost producer”, he told reporters. “We’re already seeing the first deal announced for a European buyer to start taking oil again from Iran, and we’re seeing big numbers being talked about by the Iranian government”, Richard Mallinson, geopolitical analyst at Energy Aspects, told CNBC Monday.
Norrish said the oil market faces powerful headwinds. “We will go through one more downturn cycle, but we will recover”.
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Pioneer Natural Resources, one of the largest shale oil producers, is to get $1.4 billion through new share issues to finance its still profitable operations in Texas.
