Qatar’s energy minister, the current OPEC president, said Wednesday that world oil markets were “responding positively” to output cuts implemented by the cartel and some non-cartel producers.
The move to tighten the taps is aimed at reducing a glut of oil on world markets that has depressed prices and taken a heavy toll on the finances of many energy producing nations.
OPEC and non-OPEC producers led by Russia agreed in December to cut output by nearly 1.8 million barrels per day, initially for six months, starting from the beginning of this year.
“I think the market is responding positively and you can see the drop in supply,” Mohammed Saleh al-Sada told reporters.
“As you know, what we are after is the rebalancing of the market.”
Global oil prices fell from more than $100 a barrel in June 2014 to near 13-year lows of less than $30 in early 2016. They have since bounced back above $50 following the OPEC output deal.
Sada, who was speaking to reporters as part of a Qatari-government organised press trip with international journalists in Doha, said he was happy with the level of compliance with the agreed cuts shown by individual producers.
“The degree of adherence is very high,” he said.
And he said the output curbs needed more time in place so officials could judge their effectiveness.
“It is too early to make a judgement because the agreement is for six months, extendable for six more months.”
Sada said that a scheduled OPEC meeting in May would give a “better picture” about the state of the market.
However, the minister added he was confident that ultimately prices would adjust.
“Once we get the market in a rebalanced situation, then the mechanism of determining the price is going to work automatically and we are not manipulating the price,” said Sada.
The OPEC president’s comments helped pare back a slide in prices following a reading showing US stockpiles soared last week.
Benchmark West Texas Intermediate fell more than one percent on Tuesday as markets fretted that a US government report to be released later on Wednesday would also point to an increase in stockpiles.
Around 0730 GMT, West Texas Intermediate was trading down 46 cents at $51.71 per barrel, while Brent North Sea crude was down 29 cents at $54.76.