OPEC, Russia cutting oil output deeper, faster than expected

The first meeting of the oil production monitoring committee under OPEC, where ministers intend to approve the mechanism of oil production monitoring and summarize initial outcomes of implementing the oil production cut agreement will be held in Vienna on Sunday.

He said the committee will examine how to best monitor compliance with the agreement.

Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih said on Sunday that OPEC and non-OPEC oil producers were complying with their pledge to lower oil output and that global oil inventories could be taken back to their five-year average by mid-year with full compliance.

His anticipation came after the Organization of Petroleum Exporting Countries (OPEC) agreed to cut oil production by 1.2 million barrels per day starting January 2017 and 11 non-OPEC countries vowed to cut oil output by 558,000 barrels per day.

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Global oil prices rose to an 18-month high of more than $58 a barrel after OPEC and several nonmember countries agreed to make the cuts.

Saudi Arabia, Kuwait, Qatar, Algeria, and Venezuela along with non-OPEC nations Russian Federation and Oman are meeting in the Austrian capital to set out ways of verifying that the 24 nations that signed the December accord are meeting their pledges of production cuts. Crude has since slipped about 5 percent from that peak as traders await proof that they will follow through on the deal. Meanwhile, OPEC inclines to control export indicators also. "Now, we are seeing voluntary cuts by both sides", Al-Falih said.

Saudi Arabia, Kuwait, Qatar, Algeria and Venezuela met counterparts from non-OPEC nations Russian Federation and Oman to find a way to verify that the 24 signatories to their December 10 accord are fulfilling pledges to remove a combined 1.8 million barrels a day from the market for six months. Moscow said it would make a daily reduction of 300,000 barrels by April or May, Bloomberg said.

  • Rita Burton