An agreement of the largest exporters to freeze oil production will not have an impact on the market, a senior executive from the International Energy Agency (IEA), Neil Atkinson, said. He explained that only Saudi Arabia has any ability to increase its production.
"So a freeze on production is perhaps rather meaningless. It's more some kind of gesture which perhaps is aimed ... to build confidence that there will be stability in oil prices," Reuters cited Atkinson as saying.
The expert drew attention to the fact that “historic” investment cuts taking place now increase the possibility of oil-security surprises in the “not-too-distant” future. He also suggested that if the investment doesn’t resume in 2017 and 2018, oil supply won't meet demand.
"We need a lot of investments just to stand still," the head of the IEA’s Oil Industry and Markets Division said, adding that about $300 billion is needed to sustain the current level of production.
He predicts that the oil market will be balanced in 2017, stockpiles will fall from 2018 to 2021 and global demand will grow 1.2% a year in comparison with 1.7% annual growth in 2009 to 2015., RBC reports with reference to Bloomberg.
