Oil market ‘responding positively’ to output cut

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.

“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.”

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.

Sada said he was happy with the level of compliance with the agreed cuts by individual producers. “The degree of adherence is very high,” he said.

The OPEC president’s comments help 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.