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 (bbl), oil and gas consultancy Rystad Energy said.
Last week, the OPEC and its Russia-led allies agreed to slash oil production by a bigger-than-expected 1.2 million barrels per day (MMbbl/d).
The producer group needs to stay 700,000 bbl/d below its agreed target of 31.8 MMbbl/d through 2019 in order to bring a recovery in benchmark Brent crude prices to the $70 per bbl 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 bbl, have lost nearly a third of their value since reaching a four-year high of $86.74 in early October.
Recommended Reading
Clean the Frac Up
2023-07-27 - In an effort to boost sustainability, service providers are making conscious choices to use less diesel fuel.
Fervo Energy Claims Geothermal Breakthrough with Nevada Pilot Project
2023-07-18 - Houston-based Fervo Energy says it has set record power and flow rates at its enhanced geothermal project, confirming the commercial viability of its drilling technology.
Generative AI: From Detecting Faults to Dehydrated Workers, AI Infiltrates the Oil Patch
2023-09-12 - From the oil field to the back office, AI is helping the industry speed up workflows, improve worker safety and better maintain assets.
Clear as Mud: Tech Enables Reuse of Drilling Mud
2023-08-01 - R3 Environmental Systems’ process recovers drilling fluid and water from waste generated during drilling operations for use as a direct substitute for virgin drilling fluid in new drilling mud products.Â
Universities Tackle Crude Pipeline Wax Deposits
2023-09-13 - Teams at the University of Tulsa at University of Texas at Austin are researching flow control options to prevent paraffin deposits in pipelines.