23 January 2017, Sweetcrude, Lagos – Russian Energy Minister Alexander Novak says the deal by the Organisation of the Petroleum Exporting Countries, OPEC, and non-OPEC to lower lowering their oil output was a success as all the affected countries were complying with the agreement.
“The deal is a success …All the countries are sticking to the deal …(the) results are above expectations,” Novak said after the first meeting of a committee set up to monitor the deal met on Sunday in Vienna, Austria.
Reports showed that OPEC and non-OPEC countries have made a strong start to cutting their oil output under the first such pact in more than a decade aimed at reducing a global glut in oil that has weighed on oil prices for more than two years.
Ministers said 1.5 million of almost 1.8 million barrels per day, bpd, had been taken off the market already.
Eleven of OPEC’s 13 members along with 11 non-OPEC countries have agreed to make cuts for the first half of the year. It is expected that Countries involved in the deal could reduce their output by 1.7 million bpd by the end of the month.
In a related development, the International Energy Agency, IEA, says it expects the rate of growth for global oil demand to fall to 1.3 million barrels per day, mbd, this year.
IEA projected growth at 1.5 million barrels per day, mbd, in 2016 “with most of the revision contributed by stronger European demand.”
“In 2017, however, we still expect the rate of growth for global demand to fall back to 1.3 mbd,” it said.
It added: “The prospect of higher product prices — assuming that the cost of crude oil rises in 2017 — plus the possibility of a stronger US dollar are factors behind our reduced demand growth outlook for this year.”