OPEC AND NON OPEC COUNTRIES ON TRACK TO COMPLY WITH DEAL TO CUT OIL OUTPU

OPEC AND NON OPEC COUNTRIES ON TRACK TO COMPLY WITH DEAL TO CUT OIL OUTPUT

Back in December, OPEC clinched a historic deal with Russia and other non-members to slash global production by nearly 1.8 million barrels per day (bpd) for six months, starting January, aiming to ease a global glut that has weighed on oil prices for more than two years.

Eleven of OPEC’s 13 members along with 11 non-OPEC countries have agreed to make cuts for the first half of the year.

Saudi Arabia, Kuwait, Qatar, Algeria and Venezuela are meeting counterparts from non-Opec nations Russia and Oman to figure out ways to verify that the 24 signatories to their Dec. 10 accord are following through on their pledge to remove a combined 1.8 million barrels a day from the market for six months. They intend to prove that the Organisation of Petroleum Exporting Countries (Opec) is serious about finally eliminating a global glut and dispel skepticism stemming from previous unfulfilled promises.

After the latest meeting between OPEC and non-OPEC countries in Vienna, energy ministers struck an optimistic note regarding the recent agreement to cut oil output as a committee set to monitor compliance with the deal  is due to meet for the first time. Producers have cut oil supply by 1.5 million barrels a day, more than 80 percent of their collective target, since the deal came into effect on Jan. 1, Saudi Minister of Energy and Industry Khalid Al Falih told reporters in Vienna.

Saudi Arabia, the world’s biggest oil exporter, has already exceeded its target with an output reduction of more than 500,000 barrels a day, Al-Falih said, while Algeria and Kuwait have also cut to levels beyond their targets, according to ministers from those nations. Other OPEC members such as Iraq and Venezuela have not yet reached their quotas but say they are more than half-way there. “Russia has reduced production by an average of 100,000 barrels a day, a milestone it hadn’t expected to reach until next month”, Energy Minister Alexander Novak said. Al Falih said he hoped all countries would reach full compliance with the deal next month and forecast that brimming global stockpiles of crude oil would return to normal levels by the middle of the year. The agreement expires at the end of June.

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