Reduction in oil production is paying off, says OPEC chief

The agreement to reduce oil production which was agreed by members of the Organisation of Petroleum Exporting Countries (OPEC) one year ago “is moving on the right direction”, the group’s secretary-general said yesterday.

On 1 December 2016, OPEC members agreed to curb production for the first time since 2008 in an effort to restore stability to the oil markets which have seen a slump in prices.

The 14-member oil cartel agreed to lower its monthly output by 1.2 million barrels per day (bpd) to 32.5 million bpd from 1 January 2017.

“We have accomplished what naysayers thought would be impossible,” Sanusi Barkindo, said yesterday.

“The current market conditions, the returning level of confidence and optimism in the industry are all evidence of the outcome of our joint efforts,” he added.

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Barkindo stressed that the “optimistic” return on the efforts invested is the evidence of the outcome of the joint cooperation between the OPEC members.

The OPEC official called for strengthening cooperation between oil exporting countries through “a dynamic and transparent framework for sustainable market stability in the medium to long term”.

OPEC, Russia and other oil-producing countries are due to hold the 173rd OPEC meeting on Friday in the Austrian capital of Vienna, during which they will discuss the extension of the agreement.

In anticipation to the OPEC’s meeting, crude oil Brent prices rose to $63.85 per barrel, up from $63.47.