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OPEC supply cut only way to push up oil prices

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Staff Writer | September 26, 2016
OPEC oil
Oil exploration   OPEC last reduced supply in 2008

A Dubai-based research firm said the Organization of Petroleum Exporting Countries (OPEC) needs to cut production to sustain a rise in crude prices above $50 U.S. a barrel.

According to the GIQ Industry Survey, "it does not matter if the world's biggest oil producers agree to freeze output when they meet in Algiers later this week, because they must slash supply to support a protracted price rally," said the Gulf Intelligence in a statement.

This is the view of two-thirds of the 250 international energy executives operating across the Gulf who participated in the GIQ poll on Sept. 22, and the results were released earlier Sunday.

OPEC, which pumps about one third of the world's oil supply, and non-OPEC producers are scheduled to meet on Sept. 28 in Algeria in a bid to reach a deal to boost prices by limiting oil production.

"This is the right time for action as all stakeholders are ready," Falah Alamri, OPEC Governor in Iraq said in reaction to the survey results.

OPEC last reduced supply in 2008 when the global economic crisis crippled demand.

Meanwhile, 20 percent of the survey respondents said crude oil prices will fall and test new cycle lows as they did earlier this year if OPEC and its non-OPEC peers fail to agree to at least cap production at current levels.


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