OPEC, non-OPEC oil producers meet in Kuwait over output cut
OPEC and rival oil producers are meeting in Kuwait on Sunday to review their progress with a global pact to cut supplies and may discuss whether the agreement should be extended beyond June to help stabilize the market.
The Organization of the Petroleum Exporting Countries and 11 other leading oil producers including Russia agreed in December to cut their combined output by almost 1.8 million barrels per day (bpd) in the first half of the year.
The accord, aimed at supporting the oil market has lifted crude LCOc1 to more than $50 a barrel. But the price gain has encouraged U.S. shale oil producers which are not part of the pact to boost output.
OPEC Secretary-General Mohammed Barkindo is investigating whether the deal needs to be extended, Iraqi Oil Minister Jabar Ali al-Luaibi told reporters on Sunday before the meeting.
Luaibi said that the secretary-general of OPEC is making a comprehensive investigation of the market. He may recommend an extension of the declaration and this will be seen by the next OPEC meeting (in May).
He said there were some encouraging elements that suggested the oil market was improving and that if all OPEC members agreed measures to help price stability, Iraq would support such steps.
Luaibi said that any decisions taken unanimously by members of OPEC. Iraq will be part of the decision and will not be deviating from this.
He said that Iraq’s oil production is running at 4.312 million bpd in March adding that his country had cut its oil exports by 187,000 bpd so far and would reach 210,000 bpd in a few days.
Compliance with the supply-cut deal was 94 percent in February among OPEC and non-OPEC oil producers combined, Russian Energy Minister Alexander Novak said. Russia is committed to cuts of 300,000 bpd by the end of April, adding that a deal extension could be discussed on Sunday. For today, obviously, this is within the sphere of our questions,” Novak added.
Novak said he expects global oil stockpiles to decrease in the second quarter of this year. The dynamics are positive here, I believe. Inventories in the United States and other industrialized countries had risen by less than in the past.
Kuwaiti Oil Minister Essam al-Marzouq said the oil market may return to balance by the third quarter of this year if producers comply fully with their production targets.
Marzouq said more has to be done. We need to see conformity across the board. We assured ourselves and the world that we would reach our adjustment to 100 percent conformity.
Source : Reuters