Head of OPEC underlines its role in promoting oil market stability

The Organization of Petroleum Exporting Countries (OPEC) plays a "vital role" in supporting oil market stability, the organization's chief said on Thursday, in an apparent defense of surprise output cuts earlier this month.

Addressing a joint workshop with the International Energy Agency and the International Energy Forum, Haitham Al Ghais said OPEC and its oil-producing allies (OPEC+) "have been taking proactive and pre-emptive actions to stabilize the market based on detailed research and analysis".

In early April, OPEC+ announced voluntary production cuts of 1.66 million barrels per day from May until the end of 2023, as "a precautionary measure aimed at supporting the stability of the oil market."

The move prompted oil prices to rise above 80 U.S. dollars a barrel, after falling to 70 dollars a barrel in March. However, crude prices have in recent weeks pulled back to the level prior to the OPEC+ cuts, amid continued recession risks and demand concerns.

Regarding the financial side of the crude market, the OPEC chief said on Thursday that the organization has been "observing an accelerated trend in speculative trading, with investors and other players trading futures and options at faster rates, sometimes severely impacting market liquidity and hindering price discovery mechanisms."