The U.S. crude oil production, which has fallen by 5.4 per cent since January and by almost 10 per cent since mid-2015 to 8.74 million barrels per day, is said to have assisted in moving crude oil prices above $50 per barrel.
Meanwhile, having reviewed the oil market outlook for 2016, OPEC observed in a statement issued at the end of its conference last week, that the oil market was moving through the balancing process.
The Conference observed that, since its last meeting in December 2015, crude oil prices have risen by more than 80 per cent, supply and demand is converging and oil and product stock levels in the Organisation for Economic Co-operation and Development (OECD) have recently shown relative moderation.
The latest numbers, it said, still show OECD and non-OECD inventories standing well above the five-year average and these need to be drawn down to normal levels.
The Conference also noted the very low investment level currently prevailing in the oil industry and emphasized the need to increase upstream investment in order to achieve long-term balance in the oil markets.
It said that non-OPEC supply, in response to market dynamics, peaked during 2015 and started declining, with supply expected to further decline by 740,000 barrels per day (bpd) in 2016.
According to OPEC, crude oil alone was lower by more than 1 million bpd from its peak at the beginning of 2015. Global demand is anticipated to expand by 1.2 mbpd after growing at 1.5 mbpd during 2015.
This demand growth, it noted, remains relatively healthy considering recent economic challenges and developments.
The Conference re-emphasized the coordination between member countries and with non-OPEC producers to ensure market stability in the global oil market; to obtain reasonable and sustainable revenue for oil-producing nations; and to provide a stable, reliable, efficient and economic supply to consuming countries and a fair return to investors in the oil industry.
OPEC noted that member countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers.
While emphasizing its commitment to ensuring a long-term stable and balanced oil market for producers and consumers, the conference stressed that, given the current market conditions, the Secretariat should continue to closely monitor developments in the coming months, and if necessary recommend to member countries to meet again and suggest further measures according to prevailing market conditions.
The Conference also called upon non-OPEC countries to join its endeavours, given the importance of cooperation among all major exporting countries to collectively balance the oil markets.