OPEC Ready to Talk to Other Oil Nations to Achieve 'Fair' Price

OPEC, the producer of 40 percent of the world’s oil, renewed its readiness to talk to other crude exporters to achieve “fair and reasonable prices,” according to the group’s monthly magazine. Oil jumped to the highest in a month on the report.

“There is no quick fix, but if there is a willingness to face the oil industry’s challenges together, then the prospects for the future have to be a lot better than what everyone involved in the industry has been experiencing over the past nine months or so,” said the opening commentary in the OPEC Bulletin published today on the group’s website. “As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers.”

The 12-member Organization of Petroleum Exporting Countries won’t agree to carry alone the burden of propping up oil prices by cutting supply and non-member nations would have to share the burden, it said.

“This has to be on a level playing field,” it said. “OPEC will protect its own interests. As developing countries, its members, whose economies rely heavily on this one precious resource, can ill afford to do otherwise.”

West Texas Intermediate for October delivery surged $2.47, or 5.5 percent, to $47.69 a barrel at 12:39 p.m. on the New York Mercantile Exchange. The contract is up 24 percent since Aug. 26. Futures slipped as much as $1.62 to $43.60 earlier.

“If the wide-ranging projections on oil demand are correct, then it is just a case of riding out the storm and waiting for calmer waters to return,” the publication said, adding that demand growth in 2016 “augurs well for oil prices.”

Supplies from outside OPEC are expected to contract in 2016 for the first time since 2008, sliding by 200,000 barrels a day, the International Energy Agency said on Aug. 12. With consumption set to grow by 1.4 million barrels a day, OPEC and its de facto leader Saudi Arabia could seize the chance to broaden their market as competitors damaged by the price slump fall off.

“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,” said the group’s magazine.

By  Maher Chmaytelli

Source: Bloomberg