The non-OPEC producers that have signed up to the production cut deal reached a compliance rate of 66 percent in April, up from 51 percent in March, according to the International Energy Agency (IEA).
“Overall compliance reached an estimated 66% in April, compared with 51% a month earlier,” Sputnik quoted the IEA report as saying.
Last month, Russia’s compliance averaged 77 percent.
“Russia, accounting for the largest share of committed non-OPEC output curbs, reached a compliance rate of 77% in April, reducing supplies by another 55 kb/d from the month earlier. According to Russian officials, the full 300 kb/d reduction had been attained by the end of April,” the report notes, as quoted by Sputnik.
At the end of April, Russia’s Energy Minister Alexander Novak said that Moscow had effectively reached its 300,000-bpd production cut target under its agreement with OPEC.
Russia reaching its quota of the cuts has helped non-OPEC compliance increase, following a feeble start at around 40 percent conformity, while OPEC boasted more than 90 percent compliance at that time.
The cartel’s year-to-date compliance with the cuts remained robust at 96 percent, the IEA said in today’s Oil Market Report.
“While compliance with the agreed production cuts by OPEC and the eleven non-OPEC countries has generally been strong, we need to keep a close eye on Libya and Nigeria where there are signs that production might be rising sustainably,” the agency noted, referring to the two OPEC members exempt from the cuts due to civil unrest and militant attacks that had crippled their oil output.
Compliance estimates, however, are not the sign that the oil market and analysts are mostly looking at. They want to see if the production cuts are achieving the goal to draw down the global oversupply. Oil prices jumped on Monday after Saudi Arabia and Russia said that they had agreed that the production cut deal should be extended by 9 months, until March 31, 2018.
By Tsvetana Paraskova for Oilprice.com
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