Opec policy needs to get measure of global oil needs

London

ARE we there yet? We've learned two things on the oil policy of the Organization of the Petroleum Exporting Countries (Opec) and friends from meetings in Muscat, Oman and Davos. They don't know the destination, but they know they haven't got there. Since the group started their output cuts in January last year, it gradually emerged that they had a goal of returning inventories to a five-year average level. But this benchmark has never been precisely defined.

What inventories? Where? Measured in what units? Against which five-year baseline? None of these questions have yet been addressed. Saudi oil minister Khalid Al-Falih admitted as much during the press conference after the Joint Ministerial Monitoring Committee meeting in Muscat recently, when he suggested that a technical discussion was required on what the oil market needs in terms of inventory.