Oil ministers laud strong start to output cuts

VIENNA ( Reuters) – The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said on Sunday as producers look to reduce oversupply and support prices.

“The deal is a success ...All the countries are sticking to the deal ...(the) results are above expectations,” Russian Energy Minister Alexander Novak said after the first meeting of a committee set up to monitor the deal.

Ministers said 1.5 million of almost 1.8 million barrels per day (bpd) had been taken out of the market already.

Countries involved in the deal could reduce their output by 1.7 million bpd by the end of the month, Interfax news agency quoted Novak as saying.

Eleven of OPEC’s 13 members along with 11 non-OPEC countries have agreed to make cuts for the first half of the year.

OPEC members Nigeria and Libya, both suffering setbacks in production, were given exemptions.

“The Kingdom ( of Saudi Arabia) has taken the initiative and other countries took part in very significant actions,” Saudi Energy Minister Khalid al-Falih told reporters following the meeting.

“Despite demand usually being lower in the first quarter in winter, the actions taken by the Kingdom and many other countries has impacted the market in a tangible way and we have seen the impact in spot prices,” al-Falih said.

Brent oil prices that fell to $27.10 a barrel a year ago have held above $50 per barrel since OPEC producers agreed on Dec. 10 to lower output in the first half of 2017.

The cuts are aimed at reducing a global glut in oil that has weighed on oil prices for more than two years.

Falih said implementation of agreed cuts had been “fantastic” and he hoped for 100 percent compliance in February.

“We will not accept anything less than 100 percent compliance,” Kuwaiti oil minister Essam Al-Marzouq, who chairs the five-member ministerial compliance committee, told a news conference.

The other members of the committee represent Algeria, Venezuela, Russia and Oman.

Venezuela has achieved more than half of its planned 95,000 bpd cut, oil minister Nelson Martinez told reporters.