OPEC and non-OPEC oil producing nations reported 116 percent conformity in August with their ongoing agreement to trim crude output, the highest conformity level ever, according to a statement by the producer group’s joint ministerial monitoring committee (JMMC) after its meeting on Friday.
Last December, the cartel agreed with 11 non-OPEC oil producing countries to cut output by a combined 1.8 million barrels per day for a period of six months.
The deal was extended in May this year for another nine months until the first quarter of 2018.
On Friday, the producers said they may wait until January 2018 to decide whether to carry forward the agreement beyond Q1, Reuters reported.
“I believe that January is the earliest date when we can actually, credibly speak about the state of the market,” Russian energy minister Alexander Novak said after the meeting.
Meanwhile, Saudi energy minister Khalid Al-Falih reiterated the Kingdom’s commitment to production cuts during the meeting and “cautioned against complacency,” the statement said.
He also emphasized that additional work needs to be undertaken by under-performing participating countries to bring their conformity levels to 100 percent.
OPEC’s output cuts so far have been offset by production from member nations Libya and Nigeria, which have been exempt from the agreement as their oil industries recover from unrest and militant activity.
However, recent market developments have been positive, the JMMC said, noting that recent data confirms that global oil demand growth is now better than expected for 2017, and anticipated to be robust for 2018.
Global oil demand this year is growing at a stronger-than-expected rate, particularly in Europe and the US, the International Energy Agency (IEA) said in its latest oil market report, revising upwards its growth estimate to 1.6 million barrels per day (bpd).
Meanwhile, although commercial oil stocks in the OECD fell further in August, there remains another 170 million barrels of stock overhang to be depleted, the JMMC said.
The ministerial committee’s next meeting will be held in Vienna on Nov. 29.
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