(LiveMint)
Organization of the petroleum exporting countries (Opec)and allied oil producers including Russia concluded that the crude market re-balanced in April, when their output cuts achieved a key goal of eliminating the global surplus.
The excess in oil inventories, which has weighed on prices for three years, plunged in April to less than the five-year average for stockpiles in developed nations, according to people with knowledge of the data assessed at the meeting of the Joint Technical Committee (JTC) of Opec and other producers last week in Jeddah, Saudi Arabia.
The re-balance is sure to be the focus of a tense meeting between Opec and its partners in the production cuts when they meet in Vienna next month. Top producers Saudi Arabia and Russia announced last week that the suppliers may boost output in the second half of the year. The trouble is, officials from several countries in the agreement, both inside Opec and outside, said they disapproved of the proposal and saw difficulties in reaching a consensus.
The JTC determined that stockpiles held by developed nations dropped to about 20 million barrels below their five-year average, for a total decrease of about 360 million barrels since the start of 2017, three of the people said, asking not to be identified because the JTC discussions were private. The decline was due to producers’ greater adherence to their pledged output cuts—their compliance rate reached 152% in April— and to summer demand for crude and refined products, they said.
