31 March, 2017
"We need to see conformity across the board", to 100 percent, he told the opening session of the one-day meeting, which includes Russia, Venezuela, Oman, Algeria and Iraq. If we reach our common objective, we could see balance returning to the market by the third quarter of 2017.
Nezar al-Adsani, the CEO of the Kuwait Petroleum Corp., said the decline in crude oil prices was creating risks for investments, which the official Kuwaiti news agency, KUNA, said "could create unstable conditions in Global markets".
"Our assessment of oil fundamentals and the rationale behind the production cuts do not warrant, in our view, such an extension barring either a sharp deceleration of demand growth or a sharp rebound in Libya/Nigeria production", the bank said in March 26 note.
The crude import data from Asia's biggest buyers show the scale of the challenge facing Saudi Arabia and Russian Federation, the two countries that are the lynchpins of the November agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut output by 1.8 million barrels per day (bpd) in the first six months of 2017.
In fact, oil prices are now back near $50/barrel, exactly where they were after OPEC and non-OPEC signed a landmark deal to cut production by around 1.8 million b/d.
As OPEC and especially Saudi Arabia cut production, producers not participating in the accord have been quick to fill the supply gap and gain market share. It now trades at just under $50 a barrel. "Bulging global oil stockpiles will not draw down to the five-year average unless OPEC-led cuts are extended".More news: Nunes, Comey clash on whether FBI chief invited to House Russia investigation
The reduction by the UAE has helped boost OPEC compliance this month with its production-cutting deal to 95 percent, up from an initial February estimate of 94 percent and a record high, according to Reuters surveys.
The higher prices came despite USA crude stocks rising by 1.9 million barrels to 535.5 million barrels.
"Certain factors, such as low seasonal demand, refinery maintenance, and rising non-OPEC supply, have slowed down the positive impact of the production adjustments on inventory drawdowns", the committee said in its statement.
But prices were still weighed on by resurgence in USA oil production and the expectation that inventories there would build up once again. But OPEC Secretary General Mohammad Sanusi Barkindo said he expected most of the glut to disappear in three months. The ministers asked the Organization of Petroleum Exporting Countries to make a recommendation in a month on the possibility of prolonging the supply curbs.
The question remains whether OPEC, whose committee monitoring the cuts will meet over the weekend in Kuwait, will extend the deal? The onshore field at Wafra, which produced 200,000 bpd, shut down a few months later.