While pointing to emerging optimism in the energy markets, OPEC's secretary general said Wednesday that any focus on stability should be long-term.

A decision by the Organization of Petroleum Exporting Countries last year to offset supply-side strains with coordinated production cuts helped set a floor under crude oil prices of around $50 per barrel. Strong compliance with the agreement, now in its second year, helped drive the price of oil above $70 per barrel in January, a multi-year high.

Speaking at an investment forum in Saudi Arabia, OPEC Secretary General Mohammad Barkindo said the overall market has settled on firmer ground, after several years of contraction.

"The market has now rediscovered its optimism and confidence," he said. "Others have even remarked that it has finally found its compass."

In its latest monthly market report, the International Energy Agency said that supply-side strains are easing considerably. At this point last year, the crude oil inventory held by the world's leading industrial economies sat at 264 million barrels above the five-year average. Now that's closer to 50 million barrels of overhang.

An over-supplied market, led by the emerging shale oil boom and a previous OPEC policy to defend a market share with stronger production, pushed oil below $30 per barrel in 2016. Mirroring comments made by Russia's energy minister, Barkindo said the focus should be on long-term issues, not short-term movements in the price of oil.

"Indeed, our industry is inherently a long-cycle industry that depends on massive long-term investments in research, development, exploration and production to ensure its future, and to be a dependable and reliable supplier of oil to consumers across the globe," he said.

Crude oil prices have erased the gains made in January. The price for Brent crude oil, the global benchmark, was heading toward $62 per barrel early Wednesday in what some market analysts have said is a sign of a correction.

Iranian Oil Minister Bijan Zangeneh said last month OPEC members didn't want to see Brent crude oil prices move much beyond $60 per barrel on fears the rally would incentive shale oil production, which by itself is close to rivaling Saudi Arabia.

Related Links
All About Oil and Gas News at OilGasDaily.com

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Oil prices bounce back after rough week in equities
Washington (UPI) Feb 12, 2018
Crude oil prices recovered lost ground in early Monday trading on expectations of strong global demand and a rebound in global stock markets. Crude oil prices wiped out all of their yearly gains in the span of a few trading sessions in February as inflationary fears pushed investors into safe-haven assets and out of the stock market. U.S. markets posted record-setting declines last week, but by Monday the situation had eased somewhat. China's benchmark Shanghai Composite Index closed the ... read more