The oil industry is reversing ‘cut backs’ trend with the investment of around $20 billion in the energy sector in the US for the first quarter of 2017, the Secretary General, Organisation of Petroleum Exporting Countries (OPEC), Mohammed S. Barkindo, has said.
Speaking yesterday at the 18th International Oil Summit, in Paris, Barkindo said the investment is expected to grow by 7% in 2017. “This is a significant improvement over last year, when the recurrent investment buzz words were ‘cut backs’ and ‘freezes’”.
“With crude oil production cut agreement conformity level by OPEC and Non-OPEC member countries ended up at 98% in March, there are greater signs that the market rebalancing is taking place.”
Barkindo said total OECD commercial oil stocks in March fell by 23 million barrels (mb), the second consecutive monthly drop. The total level is 275 mb above the latest five-year average, compared to 314 mb in February, and 356 mb in the same month in 2016.
He noted that across the first quarter of 2017, stocks built by 26 mb, which is much less than the seasonal average of 36 mb, even though refinery maintenance globally was much heavier. It is evident that the global inventory overhang of crude and oil products onshore is declining.
He explained that the improving sentiment was seen in a rise in WTI and Brent combined net-long positions, which reached over 751,000 contracts on April 18, from 670,000 on April 4.