OPEC's compliance with production cuts fell in June
to its lowest levels in six months as several members pumped much more
oil than allowed by their supply deal, thus delaying market rebalancing,
the International Energy Agency said on Thursday.
OPEC's
compliance with cuts slumped to 78 percent last month from 95 percent
in May as higher-than-allowed output from Algeria, Ecuador, Gabon, Iraq,
the UAE and Venezuela offset strong compliance from Saudi Arabia,
Kuwait, Qatar and Angola.
The
Organization of the Petroleum Exporting Countries and several non-OPEC
producers including Russia have agreed to cut production by around 1.8
million barrels per day until March 2018 to ease a global crude glut
spurred by booming U.S. output.
OPEC members
Libya and Nigeria were exempted from the cuts due to years of unrest
that have sapped their output. The two countries have managed to
increase their combined production by more than 700,000 bpd in recent
months, the IEA said.
The cuts have
stabilized oil at around $45-50 per barrel, but prices have come under
renewed pressure in recent weeks due to growing U.S. output and little
evidence of global stocks falling from record highs above 3 billion
barrels.
The IEA, which advises industrialized
nations on energy policy, said strong demand growth in the second half
of 2017 and in 2018 should nevertheless speed up market rebalancing.
It
said demand for OPEC's crude was forecast to rise steadily through 2017
and reach 33.6 million bpd in the fourth quarter - up 1 million bpd on
OPEC's June output.
The
IEA said stocks in industrialized nations in May were 266 million
barrels above the five-year average, down from 300 million barrels in
April. Preliminary data shows a further moderate reduction in stocks for
June.
The agency also said that while non-OPEC
producers such as the United States, Canada and Brazil were firmly back
in growth mode, the recent decline in oil prices could force some U.S.
producers to reassess their prospects.
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