Kuwait: Oil inventories to fall faster
ISTANBUL: Crude oil inventories will decline at a faster pace worldwide in the second half of the year as demand increases and Organisation of the Exporting Countries (Opec) members comply better with a global agreement to cut output, said Kuwait’s Opec governor Haitham al-Ghais.
Opec and other major producers including Russia agreed in May to extend their supply-cuts deal through March next year because stockpiles hadn’t fallen to their five-year historical average — the goal of the agreement.
Yet for the past two weeks, United States crude inventories have declined, exceeding analyst expectations.
“I see this trend continuing with more conformity from Opec and non-Opec producers, coupled with a further growth in demand,” said al-Ghais, who was appointed Kuwait’s Opec governor last month.
It would be “illogical” for Opec to change strategy now, he said in an interview, here.
Kuwait leads the committee monitoring the output curbs.
Opec’s compliance with the supply cutbacks fell last month to the lowest level since the deal started in January, said the International Energy Agency on Thursday.
Rising production from Opec was threatening a re-balancing of the market, with the group’s output last month at the highest level this year, said the IEA.
Benchmark Brent crude prices have slumped this year amid concerns that increased supply from Libya, Nigeria and the US is negating the impact of Opec’s cuts.
Concerns that supplies would keep climbing in Libya and Nigeria, both exempt from the cuts deal, were “not justified” because their production was fluctuating within a range of 300,000 to 500,000 barrels a day on average, said al-Ghais.
“We need to see if these increases will be sustained and stable,” he said. “The supply-cuts deal is working well, and there is no need to take further action at this time,” said al-Ghais. Bloomberg