First Published: 2017-04-27

Qatar says energy prices rebalancing after OPEC accord
Qatar's energy minister praises OPEC members for their adherence to a 'successful' November deal to cut production.
Middle East Online

Compliance has historically been a problem within OPEC

DOHA - Global energy markets are heading to a rebalancing in the next years after oil prices fell to historic lows due to oversupply, Qatar's energy minister said Thursday, praising OPEC members for their adherence to a "successful" November deal to cut production.

Qatar's Minister of Energy and Industry Mohammed Saleh Abdullah Al-Sada told the Atlantic Council summit in Istanbul that a decade of high oil prices had led to a dangerous oversupply and subsequent price falls.

"The consequence was an unprecedented shrinkage in investment and if that trend continues will lead to new instability, a price spiral and a tightening of the market which is not in anyone's interest," he warned.

In an unprecedented move, OPEC members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to shore up prices.

The move was also partly matched by non-cartel producers led by Russia and the critical question is whether OPEC will take new action at its next meeting on May 25.

"A balancing was bound to happen. What we want to do is to hasten that process of balancing," said the minister.

He hailed the fact that compliance to the November agreement has been almost 98 percent including all participants and had sometimes been over 100 percent among OPEC members, meaning they had exceeded the output cuts demanded.

Compliance has historically been a problem within OPEC and Al-Sada said that adherence to past agreements had been on average only 70 percent.

"The agreement was very successful and it helped the process of rebalancing," he said. "It (the market) is picking up. We hope to get a more accelerated balancing process in the second half of the year."

The energy minister of OPEC kingpin Saudi Arabia Khalid al-Falih said earlier this month that the output cuts might have to be prolonged in order to achieve the desired rebalancing of the market.

Without directly echoing his Saudi counterpart's comments, Al-Sada said the rebalancing was coming but would still take time.

"The market today is well supplied and will be for the next years. The upturn is definitely going to come and the market will balance, yes, not in the coming two years but in four or five."

Oil prices currently hover just around $50 per barrel after shedding around half of their value since mid-2014.

Al-Sada denied that low oil prices were of benefit to anyone, describing their plunge as a "negative sum game".

 

Britain probes jihadist network amid row with US intelligence

Trump gets rough ride in EU, NATO meeting

Qatari FM says country victim of smear campaign, particularly in US

Probe finds over 100 Mosul civilians killed in US air strike

Faz3a, a local NGO mobilising young people to help Mosul refugees

Turkey says over 4,000 judges, prosecutors dismissed since coup

US-led strikes kill 35 civilians in east Syria

Palestinian president says US should mediate hunger strike

Libya says working closely with Britain over concert attack

EU leaders, Erdogan meet in bid to ease tensions

Myanmar to deport Turkish family wanted for alleged coup links

Iran says it has built third underground missile factory

Saudi minister confident on oil output deal

Egyptians brace for austere Ramadan

Egypt blocks several media websites including Jazeera

IS suicide bomber kills five in Somalia

Israel uneasy over 'crazy' regional arms race

Algeria president replaces Prime Minister

16 civilians dead in coalition strikes near Raqa

4 arrested in Tunisia anti-corruption drive

German MPs call off Turkey visit as tensions fester

Palestinian hunger strike row draws solidarity, controversy

Britain raises terror alert, deploys troops after concert massacre

Qatar probes state news agency hack

At least 20 migrants killed in Mediterranean

Israeli joy at Trump visit lacks substance

Oman evacuates Australian man from Yemen

Bahrain police open fire on Shiite protest, kill five

Turkey arrests hunger strikers on terror charges

Jewish extremists ejected from Aqsa mosque compound

Prominent Egypt rights lawyer detained

Oil producers to extend output curbs at OPEC meeting

NATO aims to break Turkey-Austria partnership deadlock

Tunisia tensions simmer after protester's death

Terrorist bomb attack kills 22 at UK pop concert

Bahrain police raid Shiite sit-in killing one protester

Trump says Israelis, Palestinians ‘can make a deal’

Five dead in Syria car bomb attacks

Syria civilians suffer deadliest month of US-led strikes

US forces raid Al-Qaeda in Yemen, kill seven jihadists

Islamists to join Algeria cabinet despite poor results

Tunisia's 2.1% GDP growth marks economic upturn

Trump meets Palestinian leader in Bethlehem

Istanbul demolishes nightclub targeted in New Year attack

WHO says 315 cholera deaths in Yemen in under one month