OPEC and non-OPEC members part of an oil production cut deal meant to prop up energy prices agreed to push hard for conformity to the output limits, while Nigeria said it would join the pact once its production stabilises.
The committee is banking on increasing oil demand in the second half of 2017, which it expects will grow to reach a level of 2 million bpd, OPEC said in a statement.
OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million bpd from January 2017 until the end of March. But OPEC states Libya and Nigeria were exempted to help them recover from years of unrest.
OPEC said it will continue to monitor production by Nigeria and Libya until it stabilises before it can discuss their participation in stabilising the market.
Nigeria however, voluntarily agreed to implement production adjustments when it recovers to pre-crisis level of 1.8 million bpd, the statement said. Its June production was about 1.7 million barrels according the OPEC monthly report.
Saudi Energy Minister Khalid al-Falih said the OPEC and non-OPEC partners were committed to extending their existing deal to cut output by 1.8 million barrels per day (bpd) beyond March 2018 if necessary, according to Reuters.
The Saudi minister added that his country would limit crude oil exports at 6.6 million barrels per day in August, almost 1 million bpd below levels a year ago.
Meanwhile, OPEC said participant reached a conformity level of 98 per cent in June, which is higher than the 92 per cent in May but lower than the 110 per cent compliance in April.
“Between January and June 2017, the participating producing countries adjusted their production downwards by an estimated volume of 351 million barrels. Also, the overhang of OECD commercial oil stocks over the 5-year average level has fallen by 90 million barrels for the period from January to June 2017 and now stand at 250 million barrels,” it said in a statement.
OPEC however, said there is room for improvement and called all participating producing countries to promptly reach full conformity.
Russian Energy Minister Alexander Novak said that an additional 200,000 barrels per day of oil could be removed from the market if compliance with a global deal to cut output was 100 percent, Reuters reported.
The Joint OPEC-Non-OPEC Technical Committee in charge of monitoring conformity will look at expanding monitoring and reporting to include additional metrics.
OPEC also said that mitigating factors such as shale production are supporting the drawing down of inventories.
“Shale oil projects which have been the source of sizable share of oil supply growth in past three years are going through a period of slowing well productivity, accelerating cost inflation, deceleration of rig count growth and constrained capital market access,” it said.
The committee said it will next meet in September or earlier if necessary.