Oil Inventories Increase Despite OPEC Deal

Oil Inventories Increase Despite OPEC Deal

The Organization of Petroleum Exporting Countries (OPEC) announced oil inventories have risen and prices continued to fall despite the global deal to cut supply, Reuters reported.

According to BBC, the OPEC member Saudi Arabia is one of the countries responsible for the hike on the inventories. The kingdom, which is the biggest member of the cartel, showed a surprising output jump, increasing production in February by 263,000b/d to 10mb/d, after making a larger cut than required by the OPEC accord to ensure strong initial compliance in January.

However, the cartel noted that stockpiles will begin to fall thanks to the supply cut. OPEC’s report revised upward its forecast for world oil demand in 2017 and said the requirement for the cartel’s crude would average 32.35mb/d – more than current production, suggesting stocks will drop if output does not rise.

The output cut follows several years of depressed oil prices due to a supply glut on the market, which has seen prices more than halve since 2014. OPEC has been curbing itsproduction by about 1.2mb/d from early January, the first reduction in eight years.

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