(Ecofin Agency) - The President of the Organization of Petroleum Exporting Countries (OPEC), Mohammed Saleh Abdulla Al Sada, has stressed the need to strengthen interaction between oil producing states.

“In the future we will need enhanced interaction to foster mutual understanding between the OPEC and non-OPEC oil producing states, we need to intensify the contacts,” Al Sada said.

This according to him is necessary in addressing the oversupply in the oil market.
OPEC nations reached an agreement for the first time after eight years, in an effort to reduce a global oversupply that has depressed oil prices for over two years and weakened the economies of oil producing countries.

This deal has limited output of OPEC to between 32.5 million and 33 million barrels per day, helping to push up prices but oil prices dropped on Monday on talks by Iraq’s oil Minister, Jabar Ali al-Luaibi, that the country be exempted from OPEC crude output restrictions as it needs the income to fight the war on Islamic State.

Brent crude futures were trading at $51.68 per barrel, a decrease by 10 cents from their last close. West Texas Intermediate (WTI) crude dropped 18 cents at $50.67 a barrel.

“We are fighting a vicious war,” Luaibi said adding that the OPEC's second-largest producer, should get the same exemption as Nigeria and Libya.

Iran, Libya and Nigeria’s outputs have been hit by sanctions or conflict and have asked to be exempted from the cuts.

“We should be producing 9 million (barrels per day) if it wasn't for the wars. Some countries took our market share,” he added.

Luaibi said he supported OPEC's policy of limiting supply in order to bolster prices, and he would put Iraq's case for an exception.

OPEC ministers have handed the issue of how much each of the 14 OPEC members will produce, to a High Level Committee.
This committee will be in charge of working out the details of country allocations before OPEC's next ministerial meeting on November 30.

The cartel's Secretary-General, Mohammed Barkindo, has said it is essential that OPEC and non-OPEC countries address overcapacities in the oil market adding that Russia is a key partner in addressing energy challenges and both sides are committed to stable oil markets.

Anita Fatunji