With oil inventories still bloated, OPEC ministers are signaling not to expect any changes to their production cut agreement when a monitoring committee meets Sunday, despite the recent run-up in prices that has given momentum to forecasts of a US shale resurgence, Platts reports.
The rapid rise to about $70/b — 10% higher since OPEC’s November 30 meeting — “was not expected, quite frankly,” Nigerian oil minister Emmanuel Kachikwu said Saturday at an Atlantic Council energy forum in Abu Dhabi, though he said it was “fantastic.” OPEC would now aim to “try and protect” current price levels, he said, though the primary focus is to foster a balance between encouraging companies to invest in oil development, while not blunting global economic growth.
“The resolve is to have a reasonable figure that allows investment and at the same time allows consumers some number that allows them to be comfortable to be good consumers,” Kachikwu said. “That number is somewhere in the $60s.” As such, he said he would be in favor of “no action, really,” when the monitoring committee meets in Oman to review the deal and assess market conditions. “Right now, the fundamentals are still the same,” he said. “We shouldn’t get too bullish or excited yet. Things can change overnight.”