From Bloomberg
The surge in the global supply of shale oil has curbed OPEC’s ability to balance crude markets, a former Qatari energy minister said.
The Organization of Petroleum Exporting Countries was able to balance the market in the past because output from shale oil deposits in the U.S. and other non-OPEC nations was insignificant, Abdullah bin Hamad al-Attiyah told reporters at an industry event in Doha.
“OPEC can’t act as swing producer because it will lose market share,” he said Wednesday, referring to the group’s traditional practice of varying output to manage crude prices. Al-Attiyah was energy minister of Qatar, an OPEC member, from 1992 to 2011.
Market Forces
“Frankly, I don’t expect anything from the next OPEC meeting because, rightly, OPEC decided not to play against the market,” Claude Mandil, a former executive director of the International Energy Agency, said at the same event. “Market forces are too strong now, and you can’t play against those forces when they are strong.”
Crude has surged more than 80 percent from a 12-year low earlier this year on signs the global oversupply will ease amid declining output in Nigeria and non-OPEC countries including the U.S. Brent for July settlement increased 95 cents, or 2 percent, to $49.56 a barrel on the London-based ICE Futures Europe exchange.
“The issue now for OPEC members is how to diversify your economy from oil and gas,” Mandil told reporters in the Qatari capital. Mandil headed the IEA, a watchdog agency for the world’s most industrialized countries, from 2003 to 2007.
