OPEC members mainly complying with output-cut deal

Yergin said the first factor is the deal concluded between OPEC members and other independent producers to cut production, and the second is the fast return of the production of US oil shale with the current improvement of prices. U.S. West Texas Intermediate and Brent futures also saw increases of 44 cents and 53 cents to average at $52.61/Bbl and $55.45/Bbl, respectively.

The group’s first monthly data since the deal showed that top producer Saudi Arabia made a large cut in its crude output in January, helping boost compliance with the group’s supply-reduction deal to a record high of 93 per cent.

USA crude inventories hit a peak at 518.12 million barrels, while gasoline stocks also touched a record, rising 2.8 million barrels to 259.1 million barrels, according to the EIA.

Crude oil futures posted a two-sided trade on Wednesday before settling down for the session.

“We see the onset of a more bullish sentiment emerging in the market”, added the secretary general.

The Permian is touted for its relatively good quality oil, significant amount of existing infrastructure and established personnel, along with its proximity to major refineries and export terminals in the U.S. Gulf Coast.

“OPEC’s goal is stability of the oil market”, he said in a statement.

Bears continue to point to increased U.S. oil rig activity, and uncertainty surrounding policies of U.S. President Donald Trump, said Stuart Ive, a private client advisor at OM Financial.

The problem is that production is not the same as supply and consumption is not the same as demand.

Despite OPEC on the edge of record conformity of 90% in reducing oil production, this week’s EIA oil inventory report released bearish data. The oil minister of Oman, one of the participating non-OPEC countries, said he expected compliance to improve.

Production from Angola stood at 1.615 million bpd in January, down from the 1.639 million bpd it closed at a year ago.

Another moving part is rising geopolitical tension facing Russian Federation, and also Iran – an OPEC member that was allowed to grow production within certain limits during the coordinated cut period.

Prices have been wavering for many weeks in the low $50s as traders awaited data on OPEC’s compliance with recently agreed cuts.