The head of the International Energy Agency has reportedly said oil markets are set for a period of “greater volatility” in the wake of Opec’s output reduction deal.
Oil prices have so far reacted well to Wednesday’s announcement from Opec that its members would cut production by 1.2million barrels a day from January.
But Fatih Birol told the audience at a conference in Bratislava that US production would increase if crude prices reach $60, Reuters reported.
“Unlike in the past OPEC decisions, if prices move to around $60, a substantial amount of oil in United States is ready to come to the markets,” Mr Birol was cited as saying.
“What does it mean? Again, downward pressure on prices. A lot of oil and the demand will not be able to eat up that oil. So therefore the upward push on prices may end up in stronger growth from United States and elsewhere which are profitable not at $45 but profitable around $55-$60.”
“This volatility may be with us for some time … We are entering a period of greater oil price volatility.”
Recommended for you
