OPEC and other global oil producers including Russia won’t be discussing how to end output cuts when they meet this weekend in Oman even as crude prices have recently been rising, Kuwait’s oil minister said.
Compliance among all countries in the cuts was 125 percent in December, Bakheet Al-Rashidi told reporters Wednesday in Kuwait City. The rate is preliminary as not all secondary sources responsible for monitoring the compliance submitted data to OPEC. Compliance was 122 percent in November, the highest since the deal started in January 2017. The committee monitoring the cuts has no plans to discuss an exit strategy when it meets in Muscat, the Omani capital, he said.
“There is no plan at all to talk about any exit strategy,” Al-Rashidi said. “We are committed until the end of the year, this is the agreement.”
Oil prices have jumped above $70 a barrel for the first time in three years, and Iran’s Energy Minister Bijan Namdar Zanganeh said earlier this month OPEC doesn’t want prices above $60 because it would encourage more production from shale. Banks from Citigroup Inc. to Societe Generale SA have started to speculate the supply deal may end early.
The Organization of Petroleum Exporting Countries and allies pledged to reduce production through the end of 2018 to reduce a global glut. Producers are committed to the cuts, regardless of how high prices go, Al-Rashidi said.
Last year’s compliance averaged 106 percent, “higher than what we expected,” and this month should be about the same level as in December, he said.