Oil producing countries plan to stabilize the crude output, and probably trim it, in case the prices failed to "balance" in the markets, according to a Kuwaiti expert. Affirming that the collectively desired price is in the range of US$50-60 per barrel, Mohammad Al-Shatti told Kuwaiti News Agency (KUNA) that a number of these countries, during their upcoming meeting in Doha, Qatar, would first seek to firm the production for months, and in case the balance could not be restored, they would slash it.
Oil prices have already recovered, amid various factors related to the world economy and supply and demand, he said, adding that positive reports by the US Federal Reserve diminished concerns about the American and Chinese economies. On demand, Al-Shatti said indications show continuing restoration of the demand in the industrial and developing nations, thus boosting prospects that the glut would be absorbed. As to supplies, those from Iraq are far less than the forecast.
Elaborating, Al-Shatti said overall US output is falling in a steady fashion, though less than predictions, coinciding with decrease of a number of drilling rigs in the US. Moreover, the production in several countries has declined, as compared to 2015. He was alluding to Canada, Columbia, Brazil, the North Sea, Vietnam, Malaysia and Venezuela.
He affirmed that some of the participants in the April 17th meeting in Doha have made positive remarks respect of their serious desire to restore balance to the market in terms of pricing and producing.
They tend, he noted, to stabilize the production for several months, as a preliminary step, and if they find that the balance cannot be restored, they will trim the output, noting that the desired price ranges between USD 50-60 pb.
Aspired balance is forecast to be seen in second half of 2016, along with expected further decline of the American output, start of withdrawing from the reserves, as well as the predicted hike of demand. However, a solid restoration of the market balance cannot be expected before 2017, he cautioned.