The Organisation of Petroleum Exporting Countries has finally surrendered to market pressure, expressing its willingness to open talks with other crude producers following the persistent drop in oil prices.
Crude is currently trading near multi-year lows, and the oil cartel said it was ready to talk to other producers, according to an article in the OPEC Bulletin issued on Monday.
This, the organisation said, was a renewal of its openness for dialogue with other producers. OPEC has refused to cut its output without help from outside producers such as Russia, which have also declined to lower supply.
The commentary in the latest bulletin read in part, “Today’s continuing pressure on prices, brought about by higher crude production, coupled with market speculation, remains a cause for concern for OPEC and its members-indeed for all stakeholders in the industry.
“OPEC, as always, will continue to do all in its power to create the right enabling environment for the oil market to achieve equilibrium with fair and reasonable prices.
“As the organisation has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field. OPEC will protect its own interests.”
Oil prices surged more than five per cent on Monday, continuing a three-day rally that has erased August’s price declines, after the United States oil production data showed output falling and OPEC said it would talk with other producers about low prices.
Crude futures rebounded after retreating early on Monday, in a market with limited liquidity on a United Kingdom bank holiday, according to a Reuters report.
Prices spiked as new the US government figures indicated production was lower than initially reported for the first half of the year.
The US domestic crude oil production peaked at just above 9.6 million barrels per day in April before falling by more than 300,000 bpd over the following two months, Energy Information Administration data showed on Monday.
Fuelled by the data, prices rebounded and resumed the short-covering rally that began late last week.
Excess supply has weighed on oil, with OPEC members’ forecasts pointing to an oversupply of more than two million bpd. Agency report
