Oil producers seek bigger prices by reducing output amidst shortage fears

While OPEC and other big crude producers work toward a deal to cap production to erode a glut, industry executives are concerned the sharp drop in investment that followed the oil price crash could lead to another crisis - a supply shortage.

Over $1 trillion worth of oil projects have been canceled or delayed, Saudi Energy Minister Khalid al-Falih said on Monday at the World Energy Congress in Istanbul, after companies slashed budgets due to oil prices more than halving to around $50 a barrel since mid-2014.

Oil fields take years to develop. In many cases, a decision taken in 2016 to develop a field means oil production will start in around 2020.

OPEC, which produces around a third of the world's oil, will hold talks with non-member oil producers on Wednesday to work out details of a global agreement to cap production for at least six months. Non-OPEC member Russia, the world's largest producer, has lent its support.

And as OPEC revives its role as an oil "central banker", French oil and gas company Total Chief Executive Patrick Pouyanne urged the industry to start investing again.

More at Reuters

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