The Nation Newspaper

Tag: oil prices

  • Oil prices surge 5%

    Oil prices reversed course and turned sharply higher in mid-morning trade yesterday.

    Brent crude rose $2.60, or 4.8 per cent, to $56.40 a barrel after trading as low as $52.51 earlier. U.S. West Texas Intermediate crude rose $2.22, or 4.9 per cent, to $47.63.

    This came after earlier falling more than $1 a barrel as the world’s top producers pump at record highs and signs of economic slowdown unnerve the market.

    Traders pointed to signs that Saudi Arabia is beginning to make good on vows to cut output. Saudi exports in December fell by about half a million barrels per day to stand at 7.253 million bpd, according to tanker-tracking data from Bloomberg.

    Figures from ClipperData have shown that loadings of Saudi crude on ships bound for the United States have been falling in recent months. The Saudis have used the price-boosting strategy in the past to shrink U.S. stockpiles, the most transparent and closely-watched inventories in the world.

    The “Saudis are trying to engineer a fall, if not plunge, in U.S. crude oil inventories to give the appearance of global tightness,” said John Kilduff, founding partner at energy hedge fund Again Capital.

    Oil prices rebounded shortly after WTI hit a session low at $44.35 a barrel and as the U.S. stock market reversed some of its earlier losses.

    “Typically in the beginning of a new quarter or new year you get new fresh money coming in. I think that’s part of it,” said Kilduff.

    Earlier in the day, oil prices had slumped against a bearish backdrop. Russia reported that it pumped 11.16 million bpd in 2018, marking a post-Soviet era record. This came just two days after the U.S. government figures showed the nation’s output hit another all-time high in October at 11.54 million bpd.

    “The omens are far from encouraging,” said Stephen Brennock of oil broker PVM, citing rising non-OPEC supply and the likelihood of further increases in oil inventories.

    “The current bearish bias will therefore continue in the near term and it stands to reason that oil will struggle to break out from its current trough,” he said.

    Oil prices fell in 2018 for the first year since 2015 after buyers fled the market in the fourth quarter over growing worries about excess supply and the economic slowdown.

    Adding to concern about economic slowdown, a series of purchasing managers’ indexes for December mostly showed declines or slowdowns in manufacturing activity across Asia — the main growth region for oil demand.

    Read also: NNPC: PSCs account for most of oil production

    China issued its first batch of crude import quotas for 2019 yesterday at a lower volume than for the same batch a year ago, though expectations are for the volumes to climb later this year.

    Independent market analyst Greg McKenna said in a note yesterday that it was “difficult for traders and investors to ignore what looks like a genuine global economic slowdown.”

    The signs of rising production illustrate the challenge faced by OPEC and allies including Russia, which are returning to supply restraint in 2019, to support the market.

    But OPEC is hopeful the supply-cutting deal will work. The energy minister for the United Arab Emirates said on Tuesday he remained optimistic about achieving a market balance in the first quarter.

  • Oil prices gain on U.S. supply dip

    Oil prices gained yesterday after the United States (U.S.) government said domestic crude supplies declined for a second week in a row, though by much less than the market expected.

    Global benchmark February Brent crude LCOG9, +1.48 per cent  advanced 65 cents, or 1.1 per cent, at $60.85 a barrel on ICE Futures Europe.

    West Texas Intermediate crude for January delivery CLF9, +1.30 per cent was up 61 cents, or 1.2 per cent, at $52.26 a barrel on the New York Mercantile Exchange. Before the supply data, prices were at $52.15 and had traded as high as $52.88.

    The Energy Information Administration (EIA) reported early yesterday that U.S. crude supplies fell by 1.2 million barrels for the week ended Dec. 7. Supplies had also declined the week before, marking the first weekly decline in 11 weeks.

    However, analysts and traders, on average, expected to see a larger decline of 2.8 million barrels in crude supplies, according to a survey conducted by The Wall Street Journal, while the American Petroleum Institute on Tuesday reported a drop of 10.2 million barrels.

    After Tuesday’s “mammoth drop from the API, this morning’s EIA report has yielded a much more modest draw,” said Matt Smith, director of commodity research at ClipperData. “Refinery runs ticked a little lower, but still remain nearly half a million barrels per day above year-ago levels.”

    “Crude exports continue to be robust, also helping to keep inventories in check,” he told MarketWatch. “Implied demand for last week ticked higher, keeping a gasoline build in check, while encouraging a distillate draw.”

    The EIA reported that gasoline stockpiles climbed by 2.1 million barrels last week, while distillate stockpiles, which include heating oil, declined by 1.5 million barrels. The Wall Street Journal survey had shown expectations for supply increases of 1.8 million barrels in gasoline and 1.3 million barrels in distillate inventories.

    On Nymex, January gasoline RBF9, +1.33 per cent  rose 1.4 per cent to $1.461 a gallon and January heating oil HOF9, +1.97 per cent  rose two per cent to $1.884 a gallon.

    The data on U.S. supplies come as the globe’s major producers prepare for a planned reduction in output early next year.

    Last week, the Organisation of the Petroleum Exporting Countries (OPEC) agreed to reduce its overall member production by 800,000 barrels a day from October’s levels for six months, beginning in the new year. The cartel didn’t specify the output cut by nonmember allies, which include Russia, but news reports pegged the nonmember cuts at 400,000 barrels a day, to bring the total reduction to 1.2 million barrels a day.

    In a closely watched monthly oil-market report released yesterday, OPEC reported an 11,000 barrel-a-day decline in crude output last month, to average 32.97 million barrels a day. But production in Saudi Arabia, one of the world’s top-three producers and the biggest crude exporter, climbed by 377,000 barrels a day month-on-month, bringing Saudi output to a record 11.01 million barrels a day.

    Meanwhile, crude prices continued to be supported by a supply outage in Libya.

  • Minimum wage in face of falling oil prices

    The tripartite committee on minimum wage headed by former Head of Service Ama Pepple has since submitted its report to President Muhammadu Buhari. The committee proposed N30,000 as minimum wage, which many governors have said they cannot pay. What becomes of this proposal in the face of falling oil prices? OKWY IROEGBU-CHIKEZIE and TOBA AGBOOLA report.

    THE falling oil prices seem to have added a twist to the proposed N30,000 minimum wage.  There are fears that the sharp fall in crude prices from $88 per barrel a month ago to $59.96 per barrel as at November 29 may impinge on negotiations.

    The development poses a major risk to the Federal Government’s economic projections for 2019 and it may also hurt labour’s agitations.  Many governors have been citing the nation’s fragile fiscal position for inability to pay the proposed wage. According to the governors, their states won’t be able to meet other obligations, including provision of infrastructure and healthcare, if they agree to pay N30, 000. To them, the way out is either to review the revenue sharing formula or sack workers.

    But, the governors’ position has not gone down well with the organised labour, which is  threatening  to shut down any state that refuses to pay. The workers insist that there will  only be industrial harmony when the states accept the proposed wage. They wonder why President Muhammadu Buhari has not sent a bill to the National Assembly after receiving the report on the minimum wage from the tripartite committee headed by former Head of Service Ama Pepple.

    Nigeria Labour Congress (NLC) President  Ayuba Wabba said workers would use  all they have to fight for their due. He called on them to vote out any governor who is not ready to pay the proposed wage. He said the options being advanced by the governors were no options at all.  He implored the governors to reduce their spending, noting that the consequences of  retrenchment are too grievous for any political office holder truly elected by the people to contemplate.

    Wabba said : “We hereby reiterate our directive to Nigerian workers to vote out any politician or political party that refuses to pay the proposed national minimum wage of N30, 000. They are not doing us any favour; it is our right with the backing of the law. If they say they don’t have money, they should reduce the cost of governance. They should stop the trillions of naira they are stealing.”

    He reiterated that by law, every worker is entitled to salary or wage increment after a certain period of time so, the governors are not doing workers any favour. Some people are saying  the wage will lead to inflation.

    “When those in government are stealing trillions of naira, nobody talks about inflation. It is now that we are talking of just N30, 000 that they are talking about inflation. It is not an excuse and there is no going back”.

    He went on: “Few political office holders are bent on enslaving Nigerian workers with peanuts mislabelled as salaries. We urge such elected public officials to subject their humongous salaries and allowances, reputed to be among the highest in the world, to public perusal pro rata with the minimum wage they want to force down the throats of Nigerian workers.”

    United Labour Congress (ULC) President Joe Ajaero said the governors and National Assembly members have no reason, whatsoever, to delay the implementation of the proposed wage. He wondered how the lawmakers would oppose the wage when a senator earns  almost N14 million monthly. Ajaero said labour would seek explanation on the millions of naira the governors get as security votes, while their salaries would be scrutinised. “It is like half of the job has been done with the level of consciousness and the explanation we gave.We have given enough explanation to the masses and unanimously, nobody has denied that N30, 000 is even enough. So, I am not expecting the National Assembly to act to the contrary. We will engage the states at the point of implementation. I think the kind of cooperation we showed in achieving this N30, 000 should be shown in the states.

    “The national unions and centres should not leave the battle in the states to the state councils. It would be necessary without exception for all the unions and centres to descend on any state that will want to enslave workers through the payment of a minimum wage less than N30, 000,” Ajaero said.

    A twist to the tale Despite these tough talks, developments in the international oil market, which are outside the control of the governors and labour may have added a new dimension to the controversy.

    Oil prices, which recently started its gradual rebound, hitting an all-time high of $88 per barrel about a month ago, suddenly started a downward trend. According to the Organisation of Petroleum Exporting Countries (OPEC), oil prices trended down at $59.96 per barrel on November 29,  with analysts describing the slump as the equivalent of a tax hike and  cut in oil exporting and importing economics.

    To Lagos Chamber of Commerce & Industry (LCCI) Director-General (DG) Muda Yusuf, the price slump is bad news for the economy, which remains fragile with a gross domestic product (GDP) growth of less than two per cent.

    Yusuf said noted that the figure is below the 2019-2021 Medium-Term Expenditure Framework (MTEF) benchmark of $60 per barrel.

    He said the declining  oil price poses a major risk to the  government’s economic projections for 2019, adding that it will  impact adversely on the MTEF if the trend continues.

    The DG, in a statement obtained by The Nation,  said: “GDP in most of the Gulf economies and a slowdown of 1.5-2 per cent of GDP in Russia and Nigeria on an annualised basis is not good news for Nigerian economy, which remains fragile with GDP growth of less than two per cent.

    “The domestic foreign exchange (forex) market is already responding to the recent sharp fall in oil prices. For instance, the local currency has dropped to N370 per dollar in the parallel market, from N363 per dollar that it traded for a better part of 2018. There are fears that the sharp fall in oil prices, if sustained, could lead to a shortage of the US$”.

    Yusuf said as capital flow reversals intensify, as oil price weakens, and as foreign reserves come under pressure, there are worries that the capacity of the Central Bank of Nigeria (CBN) to sustain the current levels of intervention in the foreign exchange market will be tested, as reserves currently stand at $42 billion, down from $48 billion five months ago.

    Giving more insights on the implications of the downward trend, the He said the improvement in liquidity and relative stability in the forex market witnessed by businesses in 2018 would come under threats due to declining receipts from oil.

    This, he said, would have profound impact on the prices of imported goods and services leading to likely increase in the rate of inflation, which will adversely affect fiscal operations and further threaten the ongoing discussion around the minimum wage.

    According to Yusuf, despite sustained efforts by government to improve the business environment, foreign direct investment (FDI) inflows remain stagnated. The capital account faces significant uncertainty, as external portfolio investors exercise further caution due to developments in the global financial markets and the forthcoming general elections.

    Given these challenging economic conditions, he said, key policy reforms would be imperative to support and sustain the stability of the macro-economic environment.

    These are, among others, a foreign exchange management framework that reflects the market fundamentals, the acceleration of the economic diversification agenda, normalisation of Lagos ports environment,  oil and gas sector reform, especially the Petroleum Industry Bill (PIB).

    He called for a better debt management strategy to ease the burden of debt service, reduction in the cost of governance at all levels; improvements in the domestic revenue to reduce volatilities in government revenues.

    To labour, the proposed wage will not have any negative impact on the economy. Quoting the CBN,  Wabba said the implementation of the wage would stabilise the economy.

    According to him, the CBN Governor Godwin Emefiele had noted that other countries, such as South Africa, recently approved a new minimum wage for its citizens despite the recession in that country.

    “The CBN recently made us to understand that the implementation of N30, 000 minimum wage will strengthen the economy by empowering and putting resources in the hands of the working class,” Wabba said.

    He said the workers were getting impatient, stressing that they expected government to communicate to them and at least, give them a timeline by now. But, in the face of the falling oil prices, how will labour now marshal its argument?

  • Oil prices plunge more than 4 per cent

    Oil prices fall more than four per cent yesterday as investors sell off stocks amid concerns about slowing global economic growth.

    Crude futures have already come under pressure after forecasters like Organisation of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) knocked down their projections for global oil demand growth.

    International benchmark Brent crude fell by $3.33 a barrel, down 4.2 per cent, $76.50. The contract earlier touched $75.88, its lowest level since Sept. 7.

    U.S. light crude dropped $3.03, or 4.4 per cent, to $66.33 a barrel, after earlier hitting a two-month low at $65.74.

    The “correlation between oil prices and broader market trading is a driving factor and the volatility in both is enough of a reason to take some money off the table,” said Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions.

    Oil prices fell earlier after Saudi Arabia’s energy minister sought for a second straight day to assure markets the kingdom will keep the world adequately supplied with crude.

    The killing of journalist and U.S. resident Jamal Khashoggi by Saudi agents has stirred calls for U.S. sanctions on the kingdom. Saudi Arabia said last week it would retaliate against any punishment for the killing.

    However, Saudi Energy Minister Khalid al-Falih had said on Monday the country has no intention of cutting back oil supply. Yesterday, he said Saudi Arabia still intends to increase production to meet demand as U.S. sanctions shrink Iran’s crude exports.

    The sanctions on Iranian crude go into full effect on Nov. 4. Washington is largely depending on Saudi Arabia to fill the gap left by the loss of the Iranian barrels.

    The American Petroleum Institute is scheduled to release data on U.S. crude stockpiles yesterday afternoon, followed by more comprehensive report by the U.S. Department of Energy.

    U.S. crude inventories have risen by more than 22 million barrels over the last four weeks, the biggest increase since 2015, when the oil market was heavily oversupplied.

    “The weekly inventory data is unlikely to provide any respite, with a fifth consecutive build expected to US oil inventories,” said Matt Smith, director of commodity research at ClipperData.

    Reflecting a cautious outlook, traders have been curbing their exposure to oil markets by shutting long positions in crude futures, with fund managers cutting their combined positions by 187 million barrels in the last three weeks, according to exchange and regulatory data.

  • Oil prices drop on Trump’s message to OPEC

    Oil prices slipped yesterday following President Donald Trump tweet urging the Organisation of the Petroleum Exporting Countries (OPEC) to keep crude prices lower because of the military protection the United Statesprovides for the region.

    “The OPEC monopoly must get prices down now,” Trump insisted in the message.

    Futures prices for West Texas Intermediate crude, the U.S. benchmark, dipped slightly following the tweet before recovering and then retreating once again to trade roughly flat. On Wednesday, WTI climbed back above $70 a barrel. The price of oil is up seven per cent in the last month and nearly 18 percent for 2018.

    OPEC members will meet this weekend with non-OPEC producers such as Russia to discuss production levels. That will be the last meeting before the November U.S. midterm elections.

    The rebound gained steam earlier this year after production problems in countries like Venezuela and Libya caused the group to cut more deeply than they intended. The Trump administration also boosted prices by restoring sanctions on Iran, OPEC’s third biggest producer, and saying it aims to cut the nation’s exports to zero by November.

  • Saudi Arabia plots to push oil prices to $80

    Despite pressure from the United States (U.S) to keep prices in check, Saudi Arabia is desperately attempting to push oil prices to $80 because the country “needs cash”.. It is keen about avoiding oil prices dropping below $70 with a price aim at $80.

    A source close to the Saudi Arabia oil industry said Saudi Arabia “need” to keep prices high in an attempt to “manage the market”.

    He said this was squarely due to U.S President Donald Trump and his attempt to keep prices in check.

    The source said: “”The Saudis need oil at about $80 and they don’t want prices to go below $70. They want to manage the market like this. They need cash. They have plans and reforms and now the IPO is delayed.

    “But they don’t want anyone else talking about oil prices now. It’s all because of Trump.”

    It follows an August report by the Oxford Institute for Energy Studies which said Saudi Arabia was attempting to “strike a balance”, according to CNBC reports.

    The report said: “Striking a balance between the various objectives, and doing it within a narrow price range, is an extremely difficult task given the wide uncertainties and the different shocks hitting the oil market. Saudi Arabia is in need of flexibility in its output policy.”

    It comes after a commodities expert warned U.S crude oil prices could soar to $95.

    An energy expert and founding member of investment management company Again Capital, John Kilduff, said the U.S’s crippling sanctions, which have seen Iran’s fuel supply plummet, were a direct factor in the surge in U.S crude price.

    He told CNBC Future’s Now programme: “The global market is tight and it’s getting tighter, and the big strangle around the market right now is what’s in the process of happening with Iran and the Iran sanctions. These Iranian barrels that we’re going to lose, it’s really going to hurt. It’s really going to make a difference and tip the scale in my view to an upside surprise.”

  • Oil prices rise to $74 over Iran sanctions

    Brent oil rose to approximately 74 dollars a barrel on Wednesday as an industry report showing a drop in U.S. crude inventories and U.S. sanctions on OPEC producer, Iran, pointed to tighter supplies.

    The American Petroleum Institute reported U.S. crude stocks fell last week by 5.2 million barrels, more than three times the drop analysts expected.

    “The API inventory data published after the close of trading yesterday are lending buoyancy to prices,” Commerzbank analyst, Carsten Fritsch, said.

    Brent crude, the international benchmark, rose  to approximately 70 dollars a barrel by 1006 GMT.

    U.S. crude rose to 66.62 dollars.

    Oil also found support from a weak dollar which has slipped this week in response to U.S. President Donald Trump’s comment that he was “not thrilled” by the Federal Reserve’s interest rate increases.

    A weaker dollar makes oil less expensive for buyers using other currencies.

    The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new U.S. sanctions is also supporting the market.

    European oil companies have started to cut back on Iranian purchases, although Chinese buyers are shifting their cargoes to Iranian-owned vessels to keep supplies flowing.

    “The Iran issue continues to occupy traders’ minds,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

    OPEC has started to boost supplies following a deal with Russia and other allies in June, although producers have been cautious so far.

    Saudi Arabia told OPEC it cut supply in July, rather than increasing output as expected.

    Signs of tighter supply countered concern about slowing oil demand stemming partly from the trade dispute between the United States and China, the world’s two largest economies.

    U.S. and Chinese officials were set to resume talks on Wednesday, but Trump has predicted there will be no real progress.

  • U.S., China trade wars push up oil prices

    The escalating trade conflict between China and the United States, among other pressing financial matters, has pushed up oil prices.

    Stocks across Asia advanced yesterday as China’s efforts to stop sharp declines in its currency and capital flight supported wider sentiment in the region while oil rises.

    Brent crude increased to $73.62. U.S. crude oil rose to $68.82 a barrel.

    Analysts rued blatant oil pricing manipulation.

    Brent sweet crude oil was supposed to be at least $100.

    At the weekend, China raised the reserve requirement on some foreign exchange forward positions, making it more expensive to bet against the Chinese currency.

    The move helped pull the yuan away from 14-month lows.

    It boosted the Australian dollar, which is often played as a liquid proxy for the yuan.

    The Aussie came off two-week lows to climb as high as 0.7412 dollars after the announcement and was last at 0.7403 dollars.

    Yesterday, MSCI’s broadest index of Asia-Pacific shares outside Japan leapt 0.9 per cent – the biggest jump in a month and its second straight session of gains.

    Japan’s Nikkei edged up 0.4 per cent, while Australian shares added 0.75 per cent.

    Chinese shares were positive too, with the blue-chip share index up 0.5 per cent while Hong Kong’s Hang Seng index gained 1.3 per cent.

    On Friday, the Dow climbed 0.54 per cent, the S&P 500 gained 0.46 per cent and the Nasdaq Composite added 0.12 per cent.

    They were helped by strong corporate earnings, although gains were capped by worries over the escalating trade tensions.

    The trade dispute remains a live issue for markets with China proposing tariffs on the 60-billion-dollars worth of U.S. goods on Friday.

    A senior Chinese diplomat cast doubt on prospects of talks with Washington to resolve the bitter trade conflict.

    At the same time, U.S. President Donald Trump said his strategy of placing steep tariffs on Chinese imports is “working far better than anyone ever anticipated’’, citing losses in China’s stock market.

     

  • Oil prices dip sharply on U.S. inventories

    Oil prices declined toward lows not seen since late June yesterday after official data showed an unexpected increase in the United States (U.S.) inventories of crude oil that pushed stockpiles back toward the five-year average.

    Light, sweet crude for September delivery fell 1.7 per cent to $67.58 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, shed 2.2 per cent to $72. 60 a barrel.

    A survey showed that the Organisation of Petroleum Exporting Countries (OPEC’s) crude output increased last month as Saudi Arabia pumped near-record volumes to make good on a pledge to consumers that demand would be met.

    The kingdom’s oil production grew by 230,000 barrels a day in July, to 10.65 million barrels per day. This is just shy of an all-time peak reached in 2016, according to a Bloomberg survey of analysts, oil companies and ship-tracking data.

    Higher crude output from the Saudis, along with Nigeria and Iraq, pushed up total production from the Organization of Petroleum Exporting Countries by 300,000 barrels a day, offsetting losses from a spiraling economic collapse in Venezuela, political clashes in Libya and the onset of U.S. sanctions against Iran. The group’s 15 members, which now include Congo, collectively produced 32.6 million barrels per day.

    Saudi Arabia’s production increase shows it’s delivering on promises to prevent prices from damaging the global economy after Brent crude reached a three-year high above $80 a barrel earlier this summer. The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi’s political rival, Iran.

    When OPEC met in June, it agreed it had been cutting supplies excessively and should restore output to 100 percent of a target set in late 2016. With the production increases made since then, they’ve succeeded: compliance was at 104 percent in July.

    However, the organization is bitterly divided on the interpretation of the June agreement.

    While the Saudis and their Gulf allies said they would increase production to make up for countries unable to, Iran argues that they’re violating individual country targets and ultimately betraying the organisation. Although the sanctions don’t officially take effect until November, Iran is already seeing customers flee as the U.S. imposes penalties on buyers after Trump quit a nuclear accord with the country.

    The Saudi policy appears to be helping cool prices in the way sought by President Trump. U.S. crude futures slumped last month by the most in two years, and traded just below $68 a barrel yesterday on the New York Mercantile Exchange.

    The survey shows Saudi Arabia’s output was below the 10.8 million barrels a day threshold that the kingdom was said to be indicating it would pump in July, suggesting demand for its oil isn’t as strong as initially expected.

  • ‘Oil prices: Trump did not pressure us to increase production’

    The Secretary-General of OPEC, Mr Muhammad Barkindo, has dismissed suggestions that pressure by U.S. President Donald Trump played a role in OPEC’s decision to increase oil production.

    Barkindo, in an interview with the News Agency of Nigeria, yesterday,  said after the OPEC and non-OPEC ministers had on Saturday agreed to increase oil supplies, which remained unchanged for18 months.

    Barkindo said the decision to increase oil prices by one million barrels a day, starting July 1, 2018, was taken without political influence.

    Trump  had on April 20, tweeted “Looks like OPEC is at it again with record amounts of oil all over the place including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted!”

    He also tweeted on June 13 that “Oil prices are too high, OPEC is at it again. Not good.”

    Again, on June 22 as OPEC was concluding its meeting on wether to hold or increase crude oil supply, Trump tweeted, “Hope OPEC will increase output substantially. Need to keep prices down.”

    Barkindo said: “The impact of geopolitics is visible everywhere in this industry, and therefore our efforts to insulate the organisation from geopolitics have never been more challenging than now.

    “The founding fathers of this organisation designed it in a way that will be an unpolitical organisation focusing on the industry and as a technical body that advises member countries. So, politics is not for us in the organisation.

    “We remain focused as an unpolitical organisation and will remain focused on our core responsibility of trying to manage the market, especially the instrument of supply management to maintain stability at all times.”

    Barkindo said OPEC had transformed and that was why the organisation remained a strong voice in the energy industry.

    He said since he took over the leadership of the organisation in August 2016, the membership had grown from 13 to 16 as result of unrelenting negotiations.

    He said to make the organisation more attractive, the OPEC secreteriat was designing a framework that would allow countries join the organisation as part-time members.

    “The family is growing and for us, the more the better.

    “Equally important  is the fact that for the fist time, we have been able to establish a Declaration of Cooperation that brought 25 countries to share responsibility to this one industry that we all belong.

    “We are trying to institutionalise this cooperation because we all agree that we are better together. That is why we are focusing on how we can stay together.

    “We are now developing that framework. This will allow countries to join OPEC as full members, some as associate members,” he said.

    On the growing force of US Shale in the crude oil market, Barkindo said OPEC had successfully established a channel of communication with shale oil producers, which he said would further stabilise the market.

    “Without the shale revolution in the US bringing in now over  5 million barrels per day, the world would have faced probably one of the worst energy crisis.

    “We have been able to establish a communication channel so we now understand ourselves much better.

    “In a meeting in Houston, we agreed that we belong to the same boat and the Berlin Wall between us, we all agreed served nobody any good.

    “In fact some of them were present at the 7th OPEC international seminar which held here in Vienna,” he said.