Published: Mon, January 23, 2017
Economy | By Melissa Porter

Russia says oil producers close to production cut targets

The market can be rebalanced by this July, rather than the second half of the year as was previously expected, said Novak.

TASS quoted Novak as saying that Russian Federation had cut production by about 100,000 barrels a day.

Kuwait's Minister of Oil Essam Abdul-Mohsen Al-Marzouq arrived here on Friday to chair the first meeting of the ministerial committee in charge of monitoring compliance with a global agreement to reduce oil output.

Speaking at the World Economic Forum in Davos, Switzerland on Tuesday, Khalid al-Falih, Saudi Arabia's oil minister, said USA oil shale producers "will find they need higher prices" because the most prolific reservoirs are being exhausted and squeezed contractors are increasing the amount they charge. Meanwhile, OPEC inclines to control export indicators also.

In November 2016, the OPEC agreed to cut oil production by 1.2 million barrels per day to 32.5 million barrels per day for the whole cartel starting January 2017. A technical group, consisting of delegates from each of the five committee members along with OPEC president Saudi Arabia, will meet each month to prepare the report. Crude has since slipped about 5 percent from that peak as traders await proof that they will follow through.

After the meeting oil ministers of participating countries noted that already 1.5 million barrels of the announced quota has been cut for the market.

Asked about compliance with the deal so far, Saudi energy minister Khalid al-Falih said it had been "very good".

"We will not accept anything less than 100 per cent compliance", he said. The other members of the committee represent Algeria, Venezuela, Russia and Oman. The agreement expires at the end of June, though producers will discuss in May whether to extend it, Kuwait's Al-Marzouk said.

"If we really comply by 80 to 90 per cent, it may not be necessary", Mr Boutarfa said. "These are all encouraging signs that we are on the right track".

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