OPEC oil production output cuts have been extended to the end of 2018 as global oil demand has flourished along with the global economy.
At its 173rd meeting in Vienna, OPEC members and non members agreed to continue the production adjustments until December 2018 'while assuring full and timely conformity'.
Additionally, OPEC stipulated a clause in the new agreement which allows it to re-evaluate conformity and stock levels in June 2018. At that time it will examine prevailing market conditions and the progress made towards rebalancing.
Member countries that agreed to the extension continue their focus on a stable and balanced oil market in the interests of both consumers and producers.
The meeting observed that market rebalancing has gathered pace since May, with the OECD stock overhand falling to around 140 million barrels above the five-year average for October.
Crude oil in floating storage has also significantly fallen over the period. Global oil demand has also been robust with upward revisions since May, with oil demand growth standing above 1.5 million barrels a day for both 2017 and 2018.
HE Khalid A. Al-Falih, Saudi Arabia's Minister of Energy and president of the conference, says: 'There is now global recognition that without our collaborative action, the market would have continued to exhibit extreme volatility and future uncertainty, with far-reaching negative consequences for producers, consumers, investors, the industry, and the global economy at large.
'Oil demand growth, on the other hand, is on firm ground, and the direction of the market over the past several months shows a distinct improvement in both fundamentals and the overall market sentiment. This gratifying outcome has resulted primarily from 100% - or more- compliance to the production targets by OPEC and non-OPEC producers.
'Such positive developments to date show that we're heading in the right direction – but we are still not where we want to be in terms of inventories reaching their target levels, and must remain resolutely focused on this task.'
Storage for Mexico's new energy eraVenezuela's oil sector in tailspin A midstream first for Oman Redrawing the global oil & gas picture Regulatory update for US tank terminal operators A new leading European port Adaptable logistics for a changing market Boom time for storage in America Surviving hurricane season: preperation is key Storm preparation: flood risk and buoyancy hazards