Kuwait Sees Oil Market Balance in Early 2017

OPEC and other oil producers are likely to comply fully with a deal to reduce supply, bringing global crude markets into balance early this year, Kuwaiti Oil Minister Essam al-Marzouq said.

Some countries have not yet made the full output reduction agreed to last month, but they will increase cuts over the coming months and all producers are “highly committed” to the deal, al-Marzouq said Wednesday at a conference in Kuwait City, Bloomberg reported.

OPEC’s 13 members and 11 other producers have trimmed output by more than 1.5 million barrels a day since the deal started this year, out of a pledged 1.8 million, Saudi Arabia’s Minister of Energy and Industry Khalid al-Falih said on Monday. 

Saudi Arabia, Kuwait and Algeria say they have exceeded their targets. Participants in the collective cuts are seeking to erase a global glut and shore up crude prices, which have declined by about half from peak levels in 2014. Seven of the deal’s participants have formed a committee to monitor compliance, chaired by al-Marzouq, and agreed this week on how to do so. He told reporters in Kuwait that the committee will look mainly at production but will also consider exports data.

“The production data for January will come out on February 17 so we will look at the numbers and decide how committed everyone is," he said. "We will not accept any compliance rate other than 100% from all producers."

Oil will trade at $55 to $60 a barrel this year and Kuwait is assuming a $45 price in its budget for fiscal year 2017-18, the minister said. Crude has slipped about 5% from an 18-month high of more than $58 a barrel on Jan. 3 as traders await proof that producers are complying. The oil minister said he expects a “positive development” in the next few weeks on oilfields Kuwait shares with Saudi Arabia. Production there was halted more than a year ago, and both countries have previously stated that any reopening of the fields would not change their commitment to complying with the cuts.