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OPEC bulletin 8–9/17

C o n f e r e n c e N o t e s

“Despite the positive indicators

I just mentioned, we must acknowl-

edge that the market has turned

bearish with several key factors

driving this behaviour: reported

conformity not matching export fig-

ures, increased Libyan and Nigerian

production, US shale forecasts, and

finally the outlook past the March

2018 expiry date of our agreement.”

Strong conformity

“Although conformity with the pro-

duction agreement remains strong

at the aggregate level, some coun-

tries continue to lag — which is a

concern we must address head-on.

In addition, exports have now

become the key metric for financial

markets, and we need to find a way

to reconcile credible export data

with production data and our mon-

itoring mechanism.”

On the issue related to growing

supplies from Nigeria and Libya,

both of which were exempted from

the decision, he said the JMMC

would continue to assess the situ-

ation and act appropriately.

“We remain supportive of our

partners in both of those nations

as they work on the recovery of their industries and

economies. The Committee, however, should monitor

the impact of such growth on global supply-demand


Another important factor, he stated, is the growth

outlook for US tight oil, which currently seems to be on

a downward trend.

“Looking at US tight oil, while the drilling rig count

and production growth accelerated in the last fewmonths

with the recovery in oil prices, the sharp rate of increase in

rig levels has already started to ease significantly. There

are many factors at play, including rising costs, declining

well productivity, and the movement of production to less

prolific acreage and more marginal wells.”

Looking ahead to the 2018 outlook, he maintained

that demand growth is forecast to be robust.

“Let me also comment briefly on the 2018 outlook,

where demand growth forecasts made by various insti-

tutions range between 1.4m and 1.6m b/d. This com-

pares to US crude oil production growth of 600,000 b/d

predicted by the US Energy Information Administration.

This means that after accounting for shale growth there

will be a net of between 800,000 b/d and 1m b/d of

demand to be met by other producers.”

He concluded his remarks by emphasizing that fur-

ther collaboration between the OPEC and non-OPEC

producers will be key to achieving a stable and growing

global oil market.

“In summary, ladies and gentlemen, let me stress

that the historical collaboration and cohesion among

the OPEC and non-OPEC members remains exemplary

in spite of the headwinds we are facing, and our united

stance amid a complex market environment will con-

tinue to play the most important role in shaping market


Khalid A Al-Falih, Saudi

Arabia’s Minister of

Energy, Industry and

Mineral Resources, and

President of the OPEC