OPEC on Friday said it will look to address concerns about oil supply shortage even as the production cut accord between OPEC and non-OPEC countries saw April conformity at 152 per cent.
Twenty-four OPEC and 14 non-OPEC members, led by Russia, agreed to a voluntary production cut of around 1.8 million barrels per day to bring down oil inventories to their five-year average – a level seen as a re-balancing of global oil market to prop up oil prices.
OECD commercial stock levels have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in April 2018, OPEC has said, all but eradicating the glut.
However, since nearing that target, OPEC has said that measuring market stability through a single metric is not sufficient and it will look at a more comprehensive set of metrics.
Meanwhile, a price rally with oil hitting its highest since late 2014 at $80.50 a barrel this month has raised concerns the supply curb has gone too far.
Additionally, United States President, Donald Trump’s withdrawal from a nuclear-pact with Iran has added to the supply concerns and added upward pressure to oil prices.
Saudi Arabia and Russia at a St Petersburg meeting between pact-members, said they are prepared to east the oil cuts to calm the market worries, but they would do it gradually to avoid market shocks, according to Reuters.
Russian Energy Minister Alexander Novak said current cuts were in reality 2.7 million bpd due to a drop in Venezuelan production - somewhere around 1 million bpd higher than the initially agreed reductions.
“The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts,” Novak said in televised comments.
The OPEC/Non-OPEC Joint Ministerial Monitoring Committee (JMMC) is expected to meet again on June 21 in Austria to discuss stabilising the oil market.