ENERGY ministers from OPEC and non-OPEC countries meeting in Vienna yesterday have struck a positive note regarding their agreement to cut oil output as a committee set to monitor compliance with the deal meets for the first time.
“I am satisfied, I am optimistic and, as I said, the markets are on their way to rebalance and it’s happening,” Saudi energy minister Khalid al-Falih said.
Compliance with the agreement, which calls for cuts to begin this month, had been “fantastic,” he said.
Kuwaiti oil minister Essam Al-Marzouq, who chairs the five-member compliance committee, said it would examine how to best monitor compliance and what level of compliance would be acceptable.
The other members of the committee represent Algeria, Venezuela, Russia and Oman. A deal reached on December 10 between members of the Organization of the Petroleum Exporting Countries and non-OPEC producers marked the first such pact since 2001.
Under it, producers will lower output by nearly 1.8 million barrels per day aiming to ease a global glut that has weighed on oil prices for more than two years.
“Usually non-OPEC would raise their production to compensate for voluntary cuts by OPEC. Now, we are seeing voluntary cuts by both sides,” Falih said.
Some 1.5 million bpd in crude production had already been taken out of the market.
“The other 300,000 bpd, for all I know, is still happening,” Falih said, adding he hoped for full compliance in February.
Venezuela has achieved more than half of its planned 95,000 bpd cut, Oil Minister Nelson Martinez told reporters. Full compliance could take global oil inventories back close to their five-year average by mid-2017, lowering oil in storage by around 300 million barrels.