UNITED STATES, WASHINGTON (OBSERVATORY) — The Organization of Petroleum Exporting Countries (OPEC) on Wednesday urged a further reduction in oil production, noting that it expects production gains to outweigh demand for oil.
As OPEC and its allies prepare to meet on Thursday to consider further output cuts, OPEC’s monthly report indicated oil markets needed to stabilize.
Although global oil demand is expected to increase by about 1 million barrels per day in 2019 and 2020, the report pointed out that it may be “surpassed by strong growth in non-OPEC supply.”
OPEC expects non-member countries to increase production by about 2 million barrels in 2019 and 2.25 million barrels in 2020, largely due to increased production in the United States.
“This highlights the shared responsibility of all producing countries to support the stability of the oil market to avoid unwanted volatility and any possible setback in market imbalance,” the report said.
Saudi Arabia’s new oil minister, Prince Abdulaziz bin Salman, will attend a meeting of the joint ministerial monitoring committee of OPEC and its allies.
In his first comments since his appointment, Prince Abdul Aziz said on Monday that his country supports the process of production cuts “which will benefit all OPEC members”, without saying to the extent that it supports additional cuts.
Crude prices are currently moving around the level of $ 60 a barrel after it fell to the level of $ 50 a few months ago, although it had reached $ 70 a year ago.
Previous production cuts helped push prices up, but the latest deal earlier this year did not produce the desired results.
The report noted that production increased by 136 thousand barrels to more than 29.7 million barrels per day, mainly due to Saudi Arabia’s increase in production, according to secondary sources.
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