The days when OPEC members could all but guarantee consensus when deciding production levels for oil are long gone, according to a veteran of almost two decades of the group’s meetings.
The global glut of crude, which has contributed to a 30 percent decline in prices since June 19, has left the Organization of Petroleum Exporting Countries disunited and dependent on non-members to shore up the market, said former Qatari Oil Minister Abdullah Bin Hamad Al Attiyah. The 12-member group is set to meet in Vienna on Nov. 27.
“OPEC can’t balance the market alone,” Al Attiyah, who participated in the group’s policy meetings from 1992 to 2011, said in a Nov. 19 phone interview. “This time, Russia, Norway and Mexico must all come to the table. OPEC can make a cut, but what will happen is that non-OPEC supply will continue to grow. Then what will the market do?”
Global demand will increase this year by the least in five years, to 92.4 million barrels a day, before picking up in 2015 as economic recovery gathers pace, the International Energy Agency said on Nov. 14. Further complicating OPEC’s task is the boom in U.S. shale production, which has put the world’s biggest economy on course toward energy self-reliance. U.S. output is expected to grow 12 percent next year to the highest since 1970, according to the U.S. Energy Information Administration.