Kuwait City: Oil markets have already begun to rebalance after strong signs that producers are complying with output cuts, Kuwait Oil Minister Essam al-Marzouk said on Wednesday.
“We are confident that rebalancing in the oil markets has already started,” Marzouk said.
“We expect a positive impact on the market by the end of the first quarter of 2017,” he told a conference organised by Petroleum Intelligence.
Marzouk said that signs indicate that OPEC and non-OPEC producers who agreed in December to reduce output by a total of 1.8 million barrels per day “are complying with their commitments to cut.”
Marzouk heads a five-country committee tasked with monitoring the implementation of the landmark deal.
The committee met in Vienna on Sunday and said that compliance with the six-month accord, which took effect on January 1, had been very encouraging.
The aim is to reduce a global glut that has depressed oil prices and blown a huge hole in the public finances of producer nations, despite being good news for consumers.
Marzouk said that compliance with the cuts “represents a guarantee for the price to recover to levels that encourage investments and ensure that crude stocks return to normal levels.”
The minister said that there have been announcements from several countries including OPEC kingpin Saudi Arabia that they have already completed their cuts.
Kuwait has also fully complied with the reduction while Russia has cut 100,000 barrels per day in January and plans to extend that to 300,000 bpd soon, Marzouk said.
He expected oil prices to range between $55 and $60 a barrel throughout 2017.