Opec’s secretary general said today that the oil industry was “heading in the right direction” after producing nations agreed to output cuts.
Mohammad Sanusi Barkindo said Opec had been compelled to introduce the quotas after sustained low oil prices led to investment being slashed and exploration falling away.
“We understood that the risks for not acting were simply too dire,” Mr Barkindo said at the 7th IEA-IEF-OPEC Symposium on Energy Outlooks in Riyadh, Saudi Arabia.
He said countries had shown a “strong level of commitment” to the production cuts and that a more “bullish sentiment” was emerging on the market.
Prices have recovered to the highest levels since July 2015 to stand above $50 per barrel, crude futures are at an 18 month high, and money mangers’ bets on prices are more optimistic.
Mr Barkindo said: “This is all good news for the industry, and gives us a confirmation that we are moving in the right direction towards achieving our common goal of restoring market stability and reviving much needed investment.
“Please note, though, that these efforts should not merely be viewed through a short-term lense, but rather with a long-term perspective. The oil and gas industry depends on massive long-term investments in research, development and production to ensure its future.”
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