The oil producing nations which in late 2016 joined forced to scale back the oil production conclude that the announced reductions are happening faster than expected, reported several media on Sunday.
During the weekend, some of the countries behind the agreement met in Vienna, Austria, to take stock of the situation, and according to Saudi Arabia's minister for energy, Khalid al-Falih, the output has so far been reduced by 1.5 million barrels per day since late November when the deal was made.
At first the 13 OPEC members committed to reducing their combined output by 1.2 million barrels per day. This subsequently made 11 other countries follow suit, committing to a reduction of close to 600,000 barrels, putting the combined reduction at almost 1.8 million barrels per day.
The Vienna meeting did not reveal how much of the total reduction the OPEC countries account for, or whether Saudi Arabia has taken on a larger part of the reduction efforts to account for member states not following suit, reports the Wall Street Journal. This includes OPEC member Libya, whose oil production has more than tripled over the past six months.
And Saudi Arabia's minister for energy, Khalid al-Falih, said earlier in January that the country's oil sources are producing less than 10 million barrels per day, and that the country will consider slashing its output further in the next six months.
At the meeting on Sunday, Oman and Russia were the only non-OPEC countries present, while OPEC was present in the form of Saudi Arabia, Qatar, Venezuela, Kuwait, and Algeria.
More active rigs in the US
While the countries behind the output reduction deal have managed to scale back their production, numerous factors indicate that the US, for instance, which is not part of the agreement, has increased its output.
Analyst firm Global Risk Management notes in a market update that the number of oil rigs in the US has "increased heavily." The latest survey of active rigs in the US thus shows that there now 551 active rigs in the states, an increase of 29 rigs in the latest report.
According to the firm, this marks the highest level in almost 18 months, and the US oil production has now been increased six percent since mid-2016. Production here now stands at the same level as in late 2014.
"Question now is how much the increasing prices will spur additional production," writes Global Risk Management in the update.
The US also featured on the agenda at the meeting this weekend, as the Saudi Arabian minister commented on reports made by the Trump administration, namely that it will seek independence from OPEC while attempting to maintain a close relationship with the allied nations in the Persian Gulf in the war on terror.
"We in Saudi Arabia look forward to work closely, cooperatively, constructively with the incoming Trump administration, especially in the area of energy," said Khalid al-Fatih according to the Wall Street Journal.
The current price for a barrel of North Sea crude hovered at USD 55.3 at noon Monday CET. The price has increased almost 20 percent since the deal was made in late November.