US shale producers called to OPEC balancing effort

Members of the Organization of Petroleum Exporting Countries and a handful of non-member states started an effort to drain the surplus on the five-year average in global crude oil inventories through managed production declines in January. The agreement stands until March.

Speaking at an energy conference in New Delhi, OPEC Secretary General Mohammad Sanusi Barkindo said oil demand growth in 2018 should be "quite robust," while commercial oil stocks in the world's advanced economies continues to fall.

Barkindo said the effort in part helped the energy sector emerge from the "most vicious of all oil cycles," with oil prices tanking below $30 per barrel last year on oversupply concerns. Strong U.S. oil production and a previous OPEC policy of defending market shares with robust output contributed to the oversupply last year.

At the podium, the secretary general said it was the responsibility of all producers, conventional and unconventional alike, to contribute to the balancing effort.

"We urge our friends in the shale basins of North America to take this shared responsibility with all the seriousness it deserves, as one of the key lessons learnt from the current, unique supply-driven cycle," he said.

Federal U.S. data show total domestic crude oil production for the week ending Sept. 29 at 9.5 million barrels per day, up more than 1 million barrels per day from the same period last year. The four-week moving average for U.S. oil production is up 11.8 percent from last year.

U.S. output was curtailed during last year's market downturn, though shale oil production in general has been more resilient to lower crude oil prices than anticipated. With West Texas Intermediate, the U.S. benchmark for the price of oil, trading at a significant discount to most other rival grades, industry analysts said it's likely that more, not less, U.S. crude oil will wind up on the global market.

Barkindo stressed, however, that the oil market is a global one.

"We all, at the end of the day, when all is said and done, belong to the same industry and operate in the same markets," he said.