Emirati Energy Minister Suhail al-Mazrouei said the decision was to fully comply with OPEC's self-imposed production limit, and the difference between that and current levels is "a little bit less than 1 million barrels". The overall figure for compliance came in at 162 percent for May, up from the recent April highs of 149 percent, due to the unexpected supply disruptions out of Venezuela, Iran, Libya and Nigeria. Over the past few months, the plan has been overfulfilled, including through declining production in Venezuela and a number of African countries.
"Oil is the bigger story today with the OPEC news", he said.
But Saudi Arabia has the powerful backing of Russian Federation, which is facing mounting calls from domestic oil firms to end the cutbacks so they can cash in on the higher oil prices. Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas.
On Saturday, non-OPEC oil producers agreed to participate in the pact but a communique issued after their talks with the Vienna-based group provided no concrete numbers amid deep disagreements between OPEC arch-rivals Saudi Arabia and Iran. Benchmark Brent oil rose by $2.5 or 3.4 percent on the day to $75.55 a barrel.
Importantly, the 100 per cent compliance target is for the group as a whole, not for individual members. That means an effective redistribution of market share.
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Further to OPEC being blindsided by the rise of shale oil, the global "Easy-Money" environment perpetuated by central banks - namely the US Fed's Quantitative Easing (QE) program - has also played a key role in the Shale supply-boom. The economic environment of low interest rates and easy access to financing have kept frackers operational and have been described as "the secret fuel for the shale revolution" by Raoul LeBlanc (vice president of financial services and North American onshore at IHS Markit).
But regional rival Iran has bristled at the thought of lifting the output ceiling at a time when its oil industry is facing renewed sanctions over US President Donald Trump's decision to quit the worldwide nuclear deal with Tehran. But don't expect a drastic drop in oil price. USA light crude was $1.80 higher at $67.34. Crude oil price in India surged from $50.57 bbl in May past year to $75.31 bbl this May.
The most recent price rally followed an Opec decision to restrict supply in an effort to drain global inventories.
"Gasoline prices are higher today than they were a year ago, but they were quite low a year ago", he said.
Rising trade tensions between the United States and China continues to remain a prominent theme with neither side showing any signs of backing down.