Barkindo: Inventories Responding to OPEC Cuts

Oil inventories onshore and offshore are responding to production cuts implemented by OPEC, the secretary-general of the organization, Mohammad Barkindo, said on Sunday.

OPEC-led production cuts have helped raise global oil prices by more than 10% since they were approved in November, Reuters reported.

"Overall, I think so far so good. Inventories are responding if you look at both offshore and onshore," Barkindo said on the sidelines of the CERAWeek energy conference in Houston.

The production reduction pact, which was joined by non-OPEC countries including Russia and Kazakhstan, is intended to reduce global output by about 1.8 million barrels a day, and bring supplies closer to demand.

The six-month agreement originally took effect on Jan. 1. Barkindo said it was premature to say if the cut should be extended. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) reported in late February that producers achieved 86% conformity with pledged cuts in January.

"We have got commitment from all 24 countries. They will achieve their obligations," Barkindo told reporters. The OPEC secretary-general expects that the results of the deal on decreasing oil output in February would be better than the ones in January.

"We expect a higher level of conformity than in January. January is the first month. So, everybody is struggling," Barkindo said. According to the OPEC's February figures, the organization has cut the output down to 32.1 million barrels per day by 890,200 barrels if to compare with December, implementing the deal's provisions by over 90%.

Barkindo also said he had met shale oil producers in the United States ahead of the CERAWeek annual gathering of senior energy executives.

"We're just coming from a dinner with shale guys. They are very happy with what we have done. They deeply appreciate the efforts of OPEC and non-OPEC," he noted.