Signatories Satisfied (So Far) | Russell T. Rudy Energy LLC
“World Oil” reports that OPEC members Saudi Arabia, Kuwait, Qatar, Algeria and Venezuela, have met with their non-OPEC counterparts in Vienna. Apparently they have developed a mechanism to monitor compliance with the 24 nation agreement to cut back oil production by 1.8 million barrels of oil per day (bopd).
According to Saudi Minister of Energy and Industry, Khalid Al-Falih, the countries have cut back production by 1.5 million bopd. The Desert Kingdom has already exceeded its goal, having reduced production by more than 500,000 bopd. He indicated that Kuwait and Algeria have exceeded their goals as well, and Iraq and Venezuela are half way there. He added that he expects full compliance by next month.
Russian Energy Minister, Alexander Novak, said that his country has already cut production by 100,000 bopd and expects to have reduced production by 300,000 bopd by April or May.
Attendees at the Vienna meeting agreed that a five member monitoring committee will be chaired by Kuwait and include Russia, Algeria, Venezuela and Oman. The committee, along with OPEC president, Saudi Arabia, will meet on the 17’th of each month to prepare a report comparing actual production with individual quotas. While the committee will use data submitted by each signatory country, it appears that it has taken a page from Ronald Reagan’s play book and will “trust but verify”. Producer nation data will be compared with other sources such as IHS Cambridge Energy Research Associates, Argus Media Ltd. and the International Energy Agency. It might also reconcile this information with export volumes.
Al-Falih reiterated that he expects full compliance with production quotas by the end of next month and global crude oil inventories to be back in balance by mid-year.
To read the article in its entirety, please go to http://www.worldoil.com/news/2017/1/23/opec-non-opec-nations-agree-on-way-to-monitor-oil-cut-to-end-glut .
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