OPEC’s conformity level reaches 116% in August – Barkindo

Crude inventories went down by 170 million barrels

Temitope Joseph | Wednesday, 04 October 2017 5:20pm | economy

Mohammad Sansui Barkindo | source: OPEC

The conformity level of members of the Organization of the Petroleum Exporting Countries (OPEC), and non-OPEC in respect to voluntary production adjustments was 116% in the month of August, the OPEC Secretary General has said.

Making this disclosure at the 33rd Asia Pacific Petroleum Conference in Singapore, Mohammad Sansui Barkindo said the conformity level among the participating countries with respect to their voluntary production adjustments has been remarkably high.

It would be recalled that Nigeria was spared by the oil cartel from an output cut due to the instability in the country’s crude oil production. The Minister for Petroleum Resources, Ibe Kachikwu, who represented Nigeria at a recently held meeting in September had noted that "although Nigeria's production recovery efforts had some progress but still was not yet out of the woods".

Contained in a release obtained by thebusinesspost.ng on Wednesday, the OPEC’s Secretary General added that compliance levels have sent a clear message to the world that these countries are determined to do what is necessary to bring back sustainable market stability.

“These positive developments are good news, not only for our Member Countries, and other non-OPEC producers, but indeed this is equally good news for consumers who rely every day on oil and products to fuel their growing economies.

“Nowhere is this more relevant than in Asia, which is expected to be the engine for future world energy growth due to its expanding economies, rapid population growth, a rising middle class as well as the swift transition to urbanization and industrialization. We expect global demand to increase by nearly 16 million barrels a day until 2040 at which time it could reach around 111 million barrels a day.” Barkindo said.

Accordingly, he also noted that there is decline in the Organization for Economic Co-operation and Development (OECD) commercial crude inventories, which went down to 170 million barrels above the five-year average in August from 340 million barrels at the beginning of the year.

“Crude in floating storage was also down by an estimated 40 million barrels since the start of the year, with the support of a narrowing contango, and even signs of backwardation in relation to ICE Brent in Europe” he added.