Oil producers from Saudi Arabia to the United Arab Emirates are complying with production cuts promised last year to stabilize the market, Kuwait’s governor to the Organization of Petroleum Exporting Countries said.
Qatar, Kuwait and Oman are also complying, having announced cuts to customers, Nawal Al-Fezaia, Kuwait’s OPEC governor, said in an interview Monday in Kuwait City where OPEC’s Secretary General Mohammad Barkindo is scheduled to have talks on the cuts with Kuwait Oil Minister Essam Al-Marzouk and other officials.
OPEC and crude producers outside the group, including Russia, are implementing production cuts of about 1.8 million barrels a day this year after crude prices slumped from more than $100 a barrel since 2014 amid oversupply. Libya and Nigeria are exempt from the cuts because of conflict. Brent crude has dropped 1.4 percent this year to $56.05 a barrel after rallying 52 percent last year.
“It’s a good time to do maintenance on oil fields during production cuts,” Al-Fezaia said. Kuwait will be producing 2.7 million barrels a day by the end of the month, she said. That compares with 2.89 million barrels a day in December, according to data compiled by Bloomberg. Most of the cuts have affected Kuwait’s crude exports, and all other OPEC nations will probably do the same to meet local demand, Al-Fezaia said.
Libya and Nigeria need more time to boost their production before they can be considered to join in the cuts, she said. “Once both these countries resume full production capacity, we will review this,” Al-Fezaia said.
“Extension of the current deal or additional cuts depends on conditions in the oil market, the recovery of prices and reduction of the oversupply,” she said.