The Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Abdullah al-Badri declared this Thursday, that the organization is not ready yet to cut the production rate, despite the recent decline in oil prices and the prospect of Iranian oil production to return to the market.
He also stated after a meeting that was held with the Russian Energy Minister Alexander Novak earlier this month that the member of OPEC are not ready to cut their production, and that OPEC and Russia confirms that they expect a more balanced and stable market in 2016 adding that the current situation is a test for all producers and investors, and that there is no doubt that prices, it is still too early to say when it will happen, and we hope to see signs of a more balanced market by the end of this year, and in 2016 we expect continuity and stability in the oil market in the long term.
The Russian Energy Minister notified the Secretary General of the Organization "OPEC" that Russia and the Organization is seeking after the same goal; is to maintain a balanced and stable oil market. Novak did not discuss with Badri the pricing policy between OPEC and Russia, and regarding the issue of reducing crude production, which was confirmed by the Russian Minister of Energy with respect to the level of global demand for oil in 2015, Novak pointed out that the demand on crude in 2015 rose from 1.2 to 1.3 million barrels per day, and he expected the oil demand to rise between 7% and 11% per annum by the year 2020, and between 15% and 20% per annum by the year 2040.
He also predicted a stability in the oil market and a more demand by the end of this year, saying that the organization see signs of a more balanced market by the end of this year. And OPEC has decided last June to keep the total productions’ ceiling at 30 million barrels a day, the same production rate for the past three and a half years, defending its market share despite the decline in oil prices, which led to a decline in revenue in the members of the organization.
Specialist in OPEC says that it is likely to see a decline in oil prices this month, and this will not distract the organization from its policy of keeping production high to protect its market share, as we expect the demand to increase from what it was in the first half of 2015 despite the fact that there are a uncertainty regarding the economy in the future.