MOSCOW (MRC) — Output cuts by OPEC and other oil producers are clearing a supply glut that has weighed on crude prices for 3 yr, ministers said at a meeting on Friday to review the pact that expires in March 2018, said Reiters.
The Organization of the Petroleum Exporting Countries, Russia and several other producers have cut production by about 1.8 MMbpd since January. The group is considering extending the deal beyond its March expiry, although two sources said Friday's gathering was unlikely to make a specific recommendation on an extension.
Ministers on a panel monitoring the pact, comprising Kuwait, Venezuela and Algeria, plus non-OPEC Russia and Oman, were meeting in Vienna after oil prices gained more than 15% in the past three months to trade above USD56/bbl. "Since our last meeting in July, the oil market has markedly improved," Kuwaiti Oil Minister Essam al-Marzouq said in an opening speech at the meeting he is chairing. "The market is now evidently well on its way towards rebalancing."
Russian Energy Minister Alexander Novak said OPEC and other producers now needed to work on strategy beyond March. "We need not only to keep up the pace but continue our coordinated joint actions in full, but also work out a strategy for the future, to which we will stick starting from April 2018,” he said, adding oil demand was rising at a "high pace."
Officials said before Friday's meeting that the Joint Ministerial Monitoring Committee would consider extending the supply cut pact. But two OPEC sources said the ministers were not likely to make a specific recommendation for an extension.
The committee can make policy recommendations for the wider group of OPEC and non-OPEC producers, which meets in November.
MRC