Abu Dhabi, United Arab Emirates – The head of OPEC said on Thursday that he remains “confident” that the cartel and outside members will stick to an agreement to cut production to help boost oil prices.
The comments by OPEC Secretary-General Mohammad Sanusi Barkindo of Nigeria come as the cartel and nonmembers try to stick to the landmark deal after oil prices collapsed last year.
OPEC agreed in late November to cut its production by 1.2 million barrels a day, the first reduction agreed to by the cartel since 2008. Nearly a dozen other countries pledged in December to cut an additional 558,000 barrels a day.
“I remain very confident with what I have seen in the last several months,” Barkindo said at the Atlantic Council’s Global Energy Forum in Abu Dhabi. “The level of commitment from both sides … is unparalleled.”
He added that there’s been “a high level of compliance.” However, how that compliance will be verified has yet to be determined.
Kuwaiti Oil Minister Essam al-Marzouq, who leads a five-nation OPEC committee monitoring compliance, said that should be judged on the average at the end of the six-month cut.
Al-Marzouq declined to offer any other specifics ahead of a planned committee meeting in Vienna beginning Jan. 21.
Crude oil sold for over $100 a barrel in the summer of 2014, before bottoming out below $30 a barrel in January 2016. Crude oil futures closed at $52.25 a barrel in New York on Wednesday.
Producers acknowledged they hoped for higher prices, especially those in the Persian Gulf, whose crude-based economies have been hurting. Also hurting are the oil-dominated economies of Venezuela and Nigeria.
Emirati Energy Minister Suhail al-Mazroui said there is “a fair movement” toward higher prices, though it isn’t at a price his nation would like.
“The real correction will happen when we see the actions of all of those … concerned nations who came together to try to help the market,” he said.
However, Patrick Pouyanne, the CEO of French oil firm Total SA, offered a stark warning, saying that there’s a lot still unknown in the market – especially ahead of the inauguration of U.S. President-elect Donald Trump.
“Let’s be clear: volatility is still there,” Pouyanne said.
News from © Canadian Press Enterprises Inc. 2016