Saudi energy minister keeping close eye on US producers

Daniel Yergin (left), chairman of CERAWeek by IHS Markit, leads a discussion with Mohammad Sanusi Barkindo (center), Secretary General of OPEC, and Fatih Birol (right), Executive Director of the International Energy Agency, during CERAWeek at Hilton Americas,1600 Lamar St, on March 7, in Houston. (AP)

KUWAIT CITY/HOUSTON, March 8, (Agencies): Kuwait Oil Minister Essam Al-Marzouq said on Wednesday that OPEC’s compliance with an oil output cut reached last year stood at 140 percent in February, while non-OPEC members compliance was 50-60 percent.The Organization of the Petroleum Exporting Countries (OPEC) agreed to cut its output by about 1.2 million bpd from Jan. 1 to prop up oil prices and reduce a supply glut. Marzouq attributed the high compliance rate by OPEC members to a deep production cut by Saudi Arabia. “Saudi Arabia has voluntarily cut by more than its share to increase confidence in the output reduction issue (agreement),” he told journalists in Kuwait.He described OPEC’s compliance as “excellent” and that of the non-OPEC members as “acceptable”, adding that there was satisfaction by OPEC members with the current prices, which he described as “stable”. Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement, the second such meeting since the deal was reached.Marzouq said that the oil ministers of Saudi Arabia, Russia, Kuwait, Oman, Algeria and Venezuela will attend the meeting, along with the OPEC secretary general.Meanwhile, Saudi Arabia’s energy minister says OPEC production cuts are working to bolster crude prices and his country will look at whether other oilproducing nations are living up to their promises to curtail pumping before deciding whether to extend the cutbacks beyond this summer. In a nod to America’s ability to offset much of the OPEC cuts by pumping oil from shale formations, Khalid al-Falih said Tuesday that he is watching the US producers closely after US oil production bounced back quickly as prices rose last year. OPEC, whose members account for about one-third of global oil output, agreed to cut production beginning in January by 1.2 million barrels a day.Other countries joined in, pushing the total to nearly 1.8 million barrels. By independent accounts, those targets have mostly been met, although some producers, like non-OPEC Russia, have fallen short. “Some have not lived up to expectations,” al-Falih said, “but as a whole if you look at the totality the agreement is working well.” According to the Energy Department, US production rose to an average of 8.8 million barrels a day in the fourth quarter after dropping below 8.7 million barrels in the third quarter. The department forecast increases to 9.2 million barrels a day this year and 9.7 million — a possible record — in 2018 in a market outlook issued Tuesday. Oil prices have stabilized above $50 a barrel — a rebound from early 2016, when they plunged below $30 a barrel — although some analysts had expected closer to $60. The US benchmark closed at $53.14 a barrel Tuesday, while the global benchmark ended at $55.92.