OPEC, Russia and other non-OPEC producers have been cutting output since January 2017 to get rid of excess supply and boost prices. The deal’s main goal was to reduce oil inventories in developed nations to that of the five-year average.
In a report on Tuesday, OPEC said inventories in those nations in April fell to 26 million barrels below the five-year average. That’s down from 340 million barrels above the average in January 2017.
With oil prices LCOc1 hitting $80 a barrel this year, the highest since 2014, Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production. The producers meet on June 22-23 in Vienna to set policy.
Still, OPEC in the report was cautious on the outlook for the rest of 2018, citing a faster-than-expected rise in non-OPEC oil production and the chances of global demand weakening.
“Recently, crude oil futures have lost some momentum amid uncertainty as traders prepare for potentially more supply returning to the market,” OPEC said.
“While oil demand in the U.S., China and India shows some upside potential, downside risks might limit this potential going forward.”
The report said OPEC members were still cutting more than needed under the supply deal, even though output in May rose and top exporter Saudi Arabia is boosting supply.
OPEC output climbed by 35,000 barrels per day to 31.87 million bpd, OPEC said. Saudi Arabia reported to OPEC its own output rose back above 10 million bpd.
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