Nov. 27 (UPI) -- The focus of discussion among OPEC ministers gathered in Vienna is finding a way to stabilize the market over the long term, the secretary general said.
Mohammad Barkindo, the secretary general for the Organization of Petroleum Exporting Countries, issued a welcoming address Monday from Vienna for the group's year-end meeting. In addressing the delegates, the secretary general said special attention was paid recently to U.S. shale oil production and other non-OPEC regions.
The U.S. government estimates total production will be around 9.2 million barrels of oil per day for the full-year 2017 average. By next year, that should jump to 9.8 million barrels per day, which would beat a 48-year record for the highest annual average in U.S. history if the forecast is accurate.
That comes as crude oil prices continue to hold above $50 per barrel, after sinking below $30 per barrel early last year. U.S. shale oil has proven more resilient to the weak price environment than expected, balancing the OPEC effort to drain the surplus on the five-year average in global crude oil inventories through managed production declines.
OPEC ministers on Thursday decide if and how long they'll extend an agreement that sidelined the rough equivalent of 2 percent of total demand. The deal was implemented in January, extended once this year into March and could be drawn out for the rest of next year.
"This is beyond attaining short-term market rebalancing, and calls for strengthening our cooperation through a dynamic and transparent framework for sustainable market stability in the medium- to long-term," the secretary general said.
By October, the level of crude oil inventories for the major industrialized economies was around 140 million barrels above the five-year average, a level that's more than 200 million barrels below the record high. Looking at crude oil prices, Barkindo said the trend lines for all major crude oil benchmarks indicate a market that's clearly returning to balance.
If crude oil prices move higher after Thursday's announcement, that could trigger even further growth in U.S. shale oil production. Exploration and production activity, measured by rig counts, has moved steadily higher for much of the quarter.
The effort to extend a deal into late 2018 may be complicated by internal divisions among major parties to the agreement. Russian energy officials had shown ambivalence earlier this month and a rivalry between Iran and Saudi Arabia, two of the lead producers, could complicate negotiations.