Singapore — Crude oil futures were lower during mid-morning trade in Asia Monday in reaction to the latest information on OPEC production levels, which showed that the group needed to reduce more to comply with their supply cut agreement.
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At 10:21 am Singapore time (0221 GMT), ICE May Brent crude futures inched down 16 cents/b (0.24%) from Friday's settle to $67.00/b, while the NYMEX April light sweet crude contract fell 24 cents/b (0.41%) to $58.28/b.
The 24-country OPEC/non-OPEC alliance achieved 86% conformity in February with their agreed 1.2 million b/d in output cuts, a delegate told S&P Global Platts in Baku, Azerbaijan, on Sunday ahead of a key monitoring committee meeting.
While an improvement on January's 83% compliance, Saudi energy minister Khalid al-Falih, who has pressured members to adhere to their quotas, told reporters that he was confident that the group's performance "will catch up very soon."
A technical committee of OPEC and non-OPEC delegates met Sunday in Baku to assess market conditions, and a six-country Joint Ministerial Monitoring Committee co-chaired by Falih and Russian counterpart Alexander Novak is scheduled to meet Monday to discuss the supply accord.
Novak said the oil market had seen a "significant decline" in price volatility since the deal was agreed.
As for whether the deal should be extended, he said the OPEC/non-OPEC coalition would need to make a decision by May or June.
Falih has said that his preference is to maintain the cuts beyond their June expiry.
"OPEC and company had been seen divided on the extension of their supply curb over the weekend, providing little direction for crude prices," IG's market strategist Pan Jingyi said.
Elsewhere, Venezuela's worsening crisis, including power outages crippling its oil sector, presented a likely challenge to the oil market, the International Energy Agency warned Friday.
In its monthly oil market report, the IEA said Venezuelan output had dropped a further 100,000 b/d in February to 1.14 million b/d, and the country's oil sector now faces an uncertain future.
Falih however noted that: "The fact of the matter is that [Iran and Venezuela] have not declined precipitously -- to the point where we see there are still inventory builds," Falih said in Baku, Azerbaijan.
"Therefore, the market overall remains supplied with Venezuelan barrels," Falih said. "The overall supply situation remains long and is forecasted to be long for the rest of the year, as far as I see it."
As of 0221 GMT, the US Dollar Index was unchanged at 96.56.
--Avantika Ramesh, firstname.lastname@example.org
--Edited by Norazlina Juma'at, email@example.com