A joint committee of ministers from OPEC and non-OPEC oil producers recommended extending by six months a global deal to reduce oil output, a draft press release from their meeting on Sunday showed.
OPEC and rival oil-producing countries were meeting in Kuwait to review progress with their global pact to cut supplies.
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 in the first half of the year.
The oil ministerial committee “expressed its satisfaction with the progress made toward full conformity with the voluntary production adjustments and encouraged all participating countries to press on toward 100 percent conformity,” said the draft, seen by Reuters.
The December 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.
The committee said it took note that certain factors, such as low seasonal demand, refinery maintenance and rising non-OPEC supply had led to an increase in crude oil stocks. It also observed the liquidation of positions by financial players.
“However, the end of the refinery maintenance season and noticeable slowdown in U.S. stock build as well as the reduction in floating storage will support the positive efforts undertaken to achieve stability in the market,” it said.
Before the meeting, Iraqi Oil Minister Jabar Ali al-Luaibi told reporters 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.
“Any decisions taken unanimously by members of OPEC … Iraq will be part of the decision and will not be deviating from this,” Luaibi said.
Iraq’s oil production is running at 4.312 million bpd this month, Luaibi said, 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, Novak said, adding that a deal extension could be discussed on Sunday.
“For today, obviously, this is within the sphere of our questions,” Novak said.
Novak said he expects global oil stockpiles to decrease in the second quarter of this year.
“The dynamics are positive here, I believe,” Novak said, adding that 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.
“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,” Marzouq said.