OPEC Aiming for Higher Supply Cuts

OPEC countries are aiming to boost compliance with agreed oil output curbs further from January's high levels to clear a supply glut that has weighed on prices, the group's secretary-general said on Tuesday.

The Organization of Petroleum Exporting Countries is curbing its output by about 1.2 million barrels per day from Jan. 1, the first cut in eight years. Russia and 10 other non-OPEC producers agreed to cut half as much, Reuters reported.

OPEC Secretary-General Mohammad Barkindo said the production data for January in OPEC's most recent monthly report showed conformity from participating OPEC nations with agreed output curbs above 90%.

"All countries involved remain resolute in the determination to achieve a higher level of conformity," he said in a speech in London, according to a copy of the text.

The supply cut deal is helping to support oil prices, which at close to $57 a barrel are up from the low $30s a year ago, but still-rising US inventories and expectations the OPEC cut will revive US shale drilling have limited the rally.

Barkindo said oil inventories were expected to decline this year.

"It was evident in the last quarter of 2016 that total OECD commercial oil stocks were falling and it is expected that we will see a further drop during 2017," he said.

"We will continue to focus on the level of inventory drawdown to bring the level closer to the five-year industry average."