OPEC asks US to cut oil output and prosper global economy

The Organisation of Petroleum Exporting Countries (OPEC) has called on US shale oil drillers to cut output for the prosperity of global economy.

In its monthly oil market report (MOMR), OPEC said the US oil and gas companies have already stepped up activities in 2017 as they start to increase their spending amid a recovery in oil prices.

“As a result, US crude oil production surpassed 9 mb/d in February 2017, about 0.5 mb/d higher than the low seen in September 2016. For 2017, total US liquids production is forecast to increase by 0.82 mb/d with crude oil contributing 0.6 mb/d,” OPEC said.

“In the first two months of this year, tight crude output increased by 0.10 mb/d from December 2016, while NGLs output rose by 0.26 mb/d over the same period.

“With the pick-up seen in drilling activities, as well as increased cash flows, US tight crude output is expected to rise rapidly and increase by 0.6 mb/d in 2017.”

Calling on US to join in the rebalancing of global oil market, OPEC said “a large part of the excess supply overhang contained in floating storage has been reduced and the improvement in the world economy should help support oil demand”.

“However, continued rebalancing in the oil market by year-end will require the collective efforts of all oil producers to increase market stability, not only for the benefit of the individual countries, but also for the general prosperity of the world economy”.