Global oil inventories will start to fall by the second quarter of the year, and crude-producing countries will decide in May whether to extend their collective output cuts beyond the first half, OPEC Secretary General Mohammad Barkindo said.
“We have our target in accelerating those draw-downs to bring them closer to the five-year level -- that is our target,” Barkindo told reporters Thursday in Abu Dhabi. The Organization of Petroleum Exporting Countries isn’t targeting a specific price for crude, he said.
Global macroeconomic numbers have responded “positively” to the agreement between OPEC and non-OPEC producers to pare output in a drive to end a worldwide supply glut, Barkindo said. OPEC’s Nov. 30 decision reversed the group’s policy of pumping without limits, and other major producers including Russia have promised cuts of their own in a joint effort to support prices. Benchmark Brent crude was 14 cents higher at $55.24 a barrel in London at 8:18 a.m. local time.
The cuts began on Jan. 1 and are to stay in effect for six months. Barkindo expressed confidence in the level of commitment from all countries participating in the agreement to decrease supply.
“I met with the Iraqi minister this morning,” he said at the Atlantic Council Global Energy Forum. “He has reassured me Iraq will implement its part of the deal fully and on a timely basis.”
A committee of OPEC and non-OPEC producers responsible for monitoring compliance with the cuts will hold its first meeting on Jan. 22 in Vienna, Barkindo said. The committee, with Kuwait as chairman, also includes Algeria, Venezuela, Russia and Oman. - Bloomberg