OPEC data shows oil inventories in developed OECD economies are now 74 million barrels over their five-year average. In January 2017, crude stocks were 340 million barrels over the five-year average. Financial Tribune photo.
Participants in the OPEC pact had a compliance rate of 133 per cent in January
Data released on Tuesday shows OPEC and non-cartel participants in the OPEC supply cut agreement are closing in on their goal to cut crude inventories held by industrialized nations to their five-year average.
According to Ayed Al Qahtani, OPEC’s head of research, oil stocks in developed OECD nations were at 340 million barrels over the five-year average in January 2017. As of January 2018, one year into the OPEC supply cut agreement, crude inventories in OECD countries now sit at 74 million barrels over their five-year averages, the smallest amount since the cuts began.
The 24 Organization of Petroleum Exporting Countries and non-cartel participants in the pact, including Russia, agreed to reduce their crude output by 1.8 million barrels per day (b/d). The deal began in January 2017 and was set to run out in the summer of 2017, but the expiry date has been extended twice and is now set to expire at the end of 2018.
The group’s data showed that in January 2018, compliance among participants was 133 per cent, a record high according to Al Qahtani.
“This conformity level has been very successful in withdrawing the overhang,” Reuters reports Al Qahtani told the Energy Institute’s IP Week in London.
But, according to Reuters, cartel officials looking at different metrics may be offering a more mixed picture for OPEC. The level of the five-year average may be higher than it was a year ago, even though the size of the surplus against the average is declining.
Last week, Khalid al-Falih, Saudi Arabia’s Energy Minister, said OPEC and its pact allies will have to consider how to adjust targets. Al-Falih argues they should also take into account non-OECD inventories, floating storage and oil in transit.
Suhail al-Mazroui, United Arab Emirates Energy Minister and the current president of OPEC, added the cartel should look at other metrics.