— This is the script of CNBC's news report for China's CCTV on October 23, Monday.
120% - it represents that producing countries achieved a record-high conformity level on their voluntary production adjustments in September. This could deliver a pretty positive and meaningful signal to the market, because it shows exporting countries actively cut oil productions, and they are on track to continue to push for the market rebalance. As OPEC reiterated during the weekend, "all options are left open to ensure that every effort is made to rebalance the market for the benefit of all." The hope for OPEC to further expend the production cut deal has supported oil prices recently. Data shows that oil investors are back in the ring, with total long positioning on the WTI increasing to the highest in almost a year.
Analysts say that many investors are more willing to get into the market now because there's been a belief that the industry has sort of stabilized and it will be on the upswing.
Earlier this year, OPEC members are reportedly leaning toward extending the deal for a further nine months, till the end of 2018. However, Reuters reported that OPEC sources said stronger-than-expected demand growth may allow the group to delay a decision until early next year.
However, before the November meeting, OPEC's board of governors, who do not decide policy, will meet in Vienna first for the next two days, from Oct 23 to 24, and are likely informally to discuss options and scenarios. So any update unveiled during these two days is also being closely watched. But in an earlier interview that CNBC conduced with OPEC Secretary General Mohammad Barkindo, he said all sides are satisfied with the current production cut implementation.
[Mohammed Barkindo, Secretary General of OPEC] "What I can't rule out is the continuation of what is working. We started this mechanism in Jan and every month, we continuously view the structure, the mechanism, the level of implementation, and we have been active consultation, not only within the JMMC, but all the participants' countries. They are satisfied, and we are all satisfied that the structure and the mechanism is working."
eaking on the possibility of a production cut deal extension. Meanwhile, he also called on US shale oil producers to help curtail global oil supply. So if there could be some talks between the US and OPEC oil producers in order to boost the oil prices, then it would be a key factor to support price, but we will have to wait and see for now.
CNBC's Qian Chen, reporting from Singapore.