The group made the disclosure at its recent 174th conference in Vienna, Austria, during which the 4th OPEC and non-OPEC Ministerial Meeting also held, agreeing to raise oil production by about 1 million barrels per day, mbd, starting in July.
OPEC also reported overall improvement in market conditions and sentiment, and the return of confidence to the oil industry.
In a statement following the Vienna meeting obtained by SweetcrudeReports, the 14-member group reaffirmed its “continued commitment to stable markets, the mutual interest of producing nations, the efficient, economic, and secure supply to consumers, and a fair return on invested capital”.
Analysing oil market developments since it last met in Vienna at the end of November, 2017, the Conference noted that “the oil market situation has further improved over the past six months, with the global economy remaining strong, oil demand relatively robust, albeit with some uncertainties, and with the market rebalancing evidently continuing”.
At the 4th OPEC and non-OPEC Ministerial Meeting which followed the 174th OPEC conference, OPEC and its allies led by Russia agreed to raise oil production by about 1 million barrels.
Experts, however, say the decision will result in a nominal output gain as it will add little crude oil to markets.
According to them, the real output increase will translate to a minimum of roughly 600,000 barrels per day, b/d, of crude because certain countries will still not be able to substantially ramp up production.
Venezuela and Libya, specifically, have been hit by production losses at a time of rising global demand.
Experts maintained that based on compliance with the reigning production cut deal by OPEC and non-OPEC producers as at May, only Saudi Arabia has any real scope to add barrels and this would be to the tune of just 60,000 barrels per day, far less than OPEC has said the market requires.
OPEC, they said, will need to find a way to allow producers with spare capacity like Saudi to compensate for countries like Venezuela that do not, something Iran, for example, has opposed.
OPEC and partners, including Russia and Oman, have since last year cut output by 1.8 million bpd. The measure, which the group and its allies have consistently over-complied with, has helped rebalance the market in the past 18 months and lifted oil to around $74 per barrel from as low as $27 in 2016.
