SEVERE WX : Wind Advisory View Alerts

OPEC secretary general: Determined not to relapse

OPEC Secretary General Mohammed Barkindo tells CNN's John Defterios that the group is committed to "maintaining stability" to avoid a downturn.

Posted: Nov 15, 2018 3:13 AM
Updated: Nov 15, 2018 3:18 AM

President Donald Trump wants oil prices to keep plunging. OPEC is warning Trump to be careful what he wishes for.

That's because low prices at the pump have cost the US oil industry jobs in the past, OPEC Secretary-General Mohammad Barkindo told CNN Business on Wednesday.

As a cautionary tale, Barkindo pointed out how painful the 2014-2016 oil crash was for American oil workers. He noted that more than 100 US oil companies went bankrupt and thousands of jobs were lost during that downturn.

Once that crash ended, however, the oil rebound became a big win for energy-producing states like Texas, New Mexico, Colorado and North Dakota. The Permian Basin of West Texas has morphed into one of the most prolific oilfields in the world.

America's energy industry "benefited immensely" from the coordinated output cuts by OPEC and its allies, Barkindo told CNN Business' Emerging Markets Editor John Defterios.

"If you look at the job creation in the basins, you will appreciate what OPEC and non-OPEC have jointly done to benefit the United States," Barkindo said.

Those jobs could be threatened if crude keeps crashing like Trump wants.

Fears about a new supply glut knocked oil into a bear market last week. The selling deepened dramatically on Tuesday, when crude plunged 7%, its worst day in three years.

The OPEC comments serve as a reminder to Trump that cheap oil cuts both way for the United States. American drivers save at the gas pump, but oil workers have their livelihoods threatened.

That's a reality for the United States, which is both the biggest producer and consumer of oil in the world.

"At the end of the day, whatever decision we make will be in the interest of the United States," Barkindo said. "I'm sure he (Trump) will come to terms with reality."

OPEC pledges to do 'whatever it takes'

Much to Trump's dismay, OPEC signaled on Monday that it would consider cutting production in response to excess supply.

Despite the oil meltdown, Trump is urging OPEC not to dial back output.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production," Trump tweeted on Monday. "Oil prices should be much lower based on supply!"

Barkindo urged Trump to speak directly with OPEC. "We prefer a face-to-face dialogue with his administration," he said.

But OPEC may go forward with cuts anyway when the cartel meets in Vienna next month.

"We will do whatever it takes to sustain the stability that we have achieved," Barkindo said. "Going into 2019, there are signs of a resurgence of an imbalance which we are determined to stay the course."

The comments helped lift US oil prices 2% on Wednesday, putting crude on track to snap its record 12-day losing streak.

Of course, OPEC played a major role in the 2014-2016 crude crash.

Despite a huge glut, OPEC kept pumping aggressively in a bid to steal back market share from the United States and other high-cost producers. The cartel didn't agree to production cuts until September 2016, when pain from the crash was hurting the finances of Saudi Arabia and other OPEC nations.

OPEC is unlikely to keep production intact this time because it would lead to "sustainably lower prices," Jeffrey Currie, global head of commodities research at Goldman Sachs, wrote to clients on Tuesday. Currie argued that oil is set to "snap back" because the selloff is not justified.

Iran whiplash

The Trump administration has played a role in the latest boom-to-bust cycle for oil.

Prices soared earlier this year after Trump officials signaled a desire to cut all oil exports from Iran. But the administration later took a softer approach on Iran sanctions out of fear they could cause crude to spike to $100 a barrel. US officials granted temporary waivers allowing China, India and others to keep buying oil from Iran.

Yet Saudi Arabia, Russia and the United States ramped up output in recent months in a bid to avoid a shortfall caused by Iran.

US production has been especially strong, led by the roaring Permian Basin. America recently surpassed both Russia and Saudi Arabia to become the world's No. 1 oil producer for the first time since 1973.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 348766

Reported Deaths: 4161
CountyCasesDeaths
Multnomah54797689
Washington37988313
Marion36055444
Clackamas29094304
Lane26966298
Jackson22632300
Deschutes19577123
Umatilla14241144
Linn12380120
Douglas11795240
Josephine9233195
Yamhill8517110
Klamath7709110
Polk715380
Malheur551574
Benton529130
Coos489691
Columbia371343
Jefferson361450
Union313146
Lincoln310638
Wasco281540
Crook274745
Clatsop239529
Baker198028
Tillamook193328
Hood River188337
Morrow181623
Curry178122
Harney108424
Grant97612
Lake89011
Wallowa67012
Gilliam1484
Sherman1463
Wheeler991
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4810222

Reported Deaths: 70598
CountyCasesDeaths
Los Angeles147569426398
Riverside3693444990
San Diego3636444159
San Bernardino3563155566
Orange3227415518
Sacramento1576212279
Santa Clara1445181890
Kern1441461605
Fresno1441232051
Alameda1198871372
San Joaquin1018071708
Ventura1005241164
Contra Costa99234982
Stanislaus851571315
Tulare78945951
San Francisco54031645
San Mateo53828622
Monterey50696582
Solano45761334
Santa Barbara44836521
Merced41781577
Sonoma40711402
Placer38902415
Imperial35642764
Kings32369314
San Luis Obispo29653329
Madera23518281
Butte23364260
Shasta23360334
Santa Cruz20861218
Yolo20147247
Marin17581243
El Dorado16960149
Sutter13775169
Napa12808100
Yuba994282
Tehama9298104
Humboldt9102108
Nevada903990
Mendocino752786
Lassen746346
San Benito737372
Tuolumne673993
Lake6506104
Amador537264
Siskiyou442742
Glenn430330
Calaveras381780
Del Norte356141
Colusa301718
Inyo196739
Mono16445
Plumas15756
Mariposa127315
Trinity86011
Modoc6698
Unassigned1860
Sierra1760
Alpine1020
Out of CA00
Medford
Clear
74° wxIcon
Hi: 73° Lo: 38°
Feels Like: 74°
Brookings
Clear
68° wxIcon
Hi: 74° Lo: 42°
Feels Like: 68°
Crater Lake
Partly Cloudy
74° wxIcon
Hi: 59° Lo: 31°
Feels Like: 74°
Grants Pass
Partly Cloudy
74° wxIcon
Hi: 75° Lo: 34°
Feels Like: 74°
Klamath Falls
Clear
75° wxIcon
Hi: 71° Lo: 34°
Feels Like: 75°
Staying dry and sunny today, rain and mountain snow arrives Sunday
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events