OPEC pressures US oil firms over high production

OPEC pressures US oil firms over high production
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OPEC is asking American oil producers to meet with members of the group and to play a role in cutting global oil production.

The secretary general of the Organization of the Petroleum Exporting Countries (OPEC) told Reuters on Tuesday that he wants to meet with independent American oil firms and investors to discuss the oil market, which has been stung by low prices driven in part by increasing production in the United States.

“Both groups — independents and hedge funds — have become increasingly important in the energy markets,” Secretary General Mohammed Barkindo said. “We cannot continue to live and operate in isolation. The world of energy is undergoing a massive structural transformation, energy transition is real.”

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OPEC member nations have agreed to strict production limits in a bid to boost oil prices, which have fallen from more than $100 per barrel in 2014 to just more than $50 per barrel now.

But American oil output has not slowed, and has even increased in 2017. The Energy Information Administration predicts U.S. oil firms will produce a record-setting 10 million barrels a day by next year, breaking the previous high set in 1970.

Earlier Tuesday, OPEC’s Barkindo said “extraordinary measures” may be necessary next year to boost oil prices, CNBC reports.

"We urge our friends in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learned from the current unique supply-driven cycle," Barkindo said.