Paris: Steeper cuts in OPEC oil production are likely this month as producers increasingly implement a recent key deal aimed at stabilising oil prices, the IEA said Thursday.
"Initial indications are that a steeper (month-on-month) decline may be on the way in January," said the International Energy Agency, which analyses energy markets for major oil consuming nations.
Under a landmark deal on November 30, aimed at reducing a global supply glut that depressed oil prices, the Organization of Petroleum Exporting Countries is meant to slash its output ceiling by 1.2 million barrels per day (bpd) to 32.5 million bpd, effective January 1.
On Wednesday, the cartel said that its oil production fell in December but remains well above levels envisaged the deal. However, steeper cuts would come this month as Saudi Arabia and nearby producers move to implement the agreed reductions, the IEA said.
Under the deal, Saudi Arabia is to cut production to 10.1 million bpd, Iraq to 4.4 million bpd, Kuwait to 2.7 million bpd and UAE to 2.9 million bpd, according to OPEC.
Iran, able to export crude freely again following the lifting of sanctions under a 2015 nuclear deal with major powers, can ramp up output to 3.8 million bpd. Libya and Nigeria are exempt from the accord, while Indonesia has suspended its membership.
"OPEC´s elevated supply during 2016 helped push global oil stocks to record levels and the explicit aim ... of the deal is to speed the market´s return to balance by working off the excess," the IEA said.
"Coordinated action with non-OPEC countries... could hasten the process." On December 10, OPEC also struck an agreement with countries outside the group, most notably Russia but not the United States, for them to reduce production.
Both deals boosted oil prices by around 20 percent to above $50 per barrel, but gains have been capped by unease about implementation and rising US shale production thanks to the higher prices.
