Oil prices stable in early going as OPEC sees return of balance

In its regular monthly report, the International Energy Agency said that global oil stocks are likely to dip in 2017 and should mostly be in balance next year assuming unchanged OPEC production.

Global stock builds, rising non-OPEC production and sluggish growth in demand could weigh on the oil price, the IEA said in its closely-watched report published Thursday.

Speaking at the India Energy Forum in New Delhi, Barkindo added that the USA and OPEC had agreed they must find a joint solution to ensure oil market stability.

"A lot has been achieved towards stabilising the market, but to build on this success in 2018 will require continued discipline".

Barkindo said the effort in part helped the energy sector emerge from the "most vicious of all oil cycles", with oil prices tanking below $30 per barrel past year on oversupply concerns.

OPEC and allied producers agreed in December to pare output to clear a glut and bolster oil prices.

Prices rose 2 percent the day before to back above $50 a barrel.

There was a growing consensus that the rebalancing process was underway in the oil market, and global oil demand growth was "very strong" at nearly 2 million b/d, Barkindo reiterated to an energy conference in India.

Saudi Arabia has the added interest of wanting to keep crude prices high ahead of a public listing of five percent of shares in its giant Saudi Aramco oil firm, which is set to take place next year. He did not elaborate, but apart from growing expectations of the OPEC/non-OPEC cuts being extended to end-2018, there has been talk of more producers joining the current supply reduction agreements between 22 OPEC/non-OPEC countries.

OPEC and non-OPEC oil producers, including Russian Federation, agreed a historic deal last November to curb global oil output in a bid to support prices that have fallen from a lofty height of $114 a barrel in June 2014.

"The IEA added ".it is this current outlook that might act as the ceiling for aspirations of higher oil prices".

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production.

Once more, the Organization of the Petroleum Exporting Countries (OPEC) has contradicted statements made by its members, this time negating an earlier claim from Saudi Arabia that it welcomed more USA shale production: Mohammed Barkindo, secretary-general for OPEC, now says he wants the U.S.to participate in the cartel's crude cutback initiatives.

Accordingly India INX (India International Exchange) will commence trading in WTI Crude Oil from October 20 and Brent Crude Oil futures contract from October 31. The main United States contract, WTI, was at $50.96.