The Organization of the Petroleum Exporting Countries (OPEC) report showed that the surplus on the global oil market has been virtually eliminated due to the organization’s covenant to reduce supplies since January 2017 and because of the growing global demand. The main objective of the supply pact was to reduce excessive oil resources to a five-year average.
Saudi Arabia, the world’s largest oil exporter and actual Organization’s leader, stated that OPEC reduced production in April to its lowest level.
The latest OPEC report says that producers cut supplies more than required by the terms of the pact. Companies that are not parties to the agreement, for instance, representatives of the US shale market, begin to face restrictions on future products because of this.
According to the report, oil volumes in the industrialized OECD countries fell in March to nine million barrels above the five-year average, compared with 340 million barrels above the January 2017 average. It is also noted that the oil market was reinforced in April by the resumption of geopolitical problems and a high level of demand.
The deal between OPEC, Russia, and other non-OPEC producers contributed to the oil prices rise for LCOc1 by 40% since the entry into force. Oil reached 78.28 dollars per barrel on May 14, which is the highest rate since November 2014.