Prospects have brightened for a high-level summit to discuss the oil market, the first one after 2007, as Opec and non-Opec countries are studying a Venezuelan proposal for a heads-of-state meet to address low oil prices and stabilise the market.
Brent crude has dropped more than 50% in the last year amid a surplus in global supply. Oil is trading around $48 a barrel, less than half its level of June 2014.
Venezuela has proposed that Opec hold a session to arrest the slide and wants to invite non-Opec producers such as Russia.
For months, cash-strapped Venezuela has been pushing for an emergency meeting of the Opec with Russia to stem a tumble in prices.
GCC states - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates - together pump about 18mn barrels per day. Of these Qatar, Saudi, Kuwait and the UAE are members of the Opec, which supplies about 40% of the world’s oil.
“Different countries are studying this proposal and there will be a response from both the Opec and outside of it. But we are in the study phase,” HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada, said in Doha at the weekend.
Al-Sada said the oil ministers of the six-nation Gulf Co-operation Council states, which met in Doha on Thursday, reviewed prices of oil products amid reports the GCC states may unify fuel prices.
At the opening of the meeting, the minister said the GCC states would remain the trusted partner as a reliable source for energy to ensure stability of the global energy market.
GCC energy producers will continue to invest to maintain stable energy supplies, he said.
Oil supplies outside Opec are expected to decline next year by the most in more than two decades as the price rout curbs US shale output, according to the Paris-based International Energy Agency (IEA).
Production outside the Organisation of Petroleum Exporting Countries will fall by 500,000 barrels a day to 57.7mn in 2016, the Paris-based IEA said in its monthly report on Friday.
While fuel demand this year will be the strongest since 2010, record-high oil inventories in developed nations won’t start to diminish until the second half of next year, and the revival of Iranian exports with the removal of sanctions may swell supplies further, it said.
US shale output will shrink by almost 400,000 barrels a day next year as futures contracts for 2016 trade below the price needed for most projects to break even, the agency said.
As recently as July, the IEA had projected that US shale supply would expand by 60,000 barrels a day in 2016.
As a result of the projected drop in non-OPEC output, the amount of crude needed from Opec in 2016 will increase to 31.3mn, which shows an increase of 1.6mn from the current level.
But that’s still less than the 31.57mn daily barrels the organisation’s 12 members pumped in August.
A Bloomberg report showed global oil demand will climb by 1.7mn barrels a day this year to 94.4mn as low prices stoke consumption, before growth eases in 2016 to 1.4mn barrels a day.