Oil producer cartel OPEC and its partners will need to keep production lower than their agreed target through 2019 for benchmark Brent crude to come back to $70 a barrel. oil and gas consultancy Rystad Energy said.
Last week. the Organisation of the Petroleum Exporting Countries and its Russia-led allies agreed to slash oil production by a bigger-than-expected 1.2 million barrels per day (bpd).
The producer group needs to stay 700.000 bpd below its agreed target of 31.8 million bpd through 2019 in order to bring a recovery in benchmark Brent crude prices to the $70 per barrel level. Rystad analyst Bjornar Tonhaugen said in a note.
“The agreed production cuts will not be enough to ensure sustained and immediate recovery in oil prices.“ Tonhaugen said.
Crude prices have see-sawed of late on worries of a global economic slowdown on one hand. and a boost from production cuts on the other.
Brent crude futures. currently trading at just over $61 a barrel. have lost nearly a third of their value since reaching a four-year high of $86.74 in early October.