Opec says oil stocks still increasing, Saudis raise output
The Organization of the Petroleum Exporting Countries (Opec) said on Tuesday oil inventories have risen despite a global deal to cut supply and raised its forecast of production in 2017 from outside the group, suggesting complications in an effort to clear a glut and support prices.
In a monthly report, Opec also said its biggest producer Saudi Arabia increased output in February by 263,000 barrels per day to 10 million bpd, after in January making a larger cut than required by the Opec accord to ensure strong initial compliance.
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Opec is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1, the first reduction in eight years. Russia and 10 other non-Opec producers agreed to cut half as much. Opec said in the report oil stocks in industrialised nations rose in January to stand 278 million barrels above the five-year average, of which the surplus in crude was 209 million barrels and the rest refined products.
"Despite the supply adjustment, stocks have continued to rise, not just in the US, but also in Europe," Opec said. "Nevertheless, prices have undoubtedly been provided a floor by the production accords."
Oil prices fell after the release of the report to trade close to $50 a barrel, their lowest since November. Crude is still up from about $40 a barrel a year ago and a 12-year low near $27 reached in January 2016.
In the report, Opec pointed to an increase in its members' compliance with the deal, according to figures from secondary sources that Opec uses to monitor output.