The Organization of the Petroleum Exporting Countries reduced its oil output for a second month in February. In January, while OPEC had claimed a 90% compliance rate, Reuters survey had pegged the compliance rate at 82%.
OPEC's level of compliance with production cuts in January has been acceptable, Zanganeh said on Monday, expressing hope for further cooperation from non-OPEC members in the near future.
"OPEC will be happy with price stability in the upper half of our shale band (i.e. trying to keep prices in the $50-60 upper half) and above $60 a barrel, we will see more OPEC cheating as members do not want to see USA shale oil come back too strongly".
Within the deal with OPEC and non-OPEC oil producers Kazakhstan has committed to cut oil output by 20,000 barrels per day from November 2016 level since January 1 2017.
OPEC and other large producers led by Russian Federation agreed late previous year to reduce their total oil output by nearly 1.8 million bpd in the first half of 2017 to boost the price of crude, a key source of revenue.
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The Energy Information Administration said inventories rose by 1.5 million barrels last week. Meantime, according to OPEC output cut agreement, Iraq pledged to decrease production by 210,000 barrels a day from the 3.91 million it pumped in October.
The EIA report also showed that gasoline inventories declined by 546,000 barrels.
"Speculators are waiting for the OPEC/non-OPEC supply cuts to kick in and magnify the crude drawdowns that typically begin in earnest in the U.S.in a couple of months", said Anthony Starkey, manager of energy analysis at Platts Analytics, a forecasting and analytics unit of S&P Global Platts.
Oil futures finished lower on March 2 as concerns over a record build-up in US stockpiles weighed on the market, with producers boosting shale oil production. The sharp domestic production also played a big role with the monumental milestone; current production has increased to 9 million barrels for the past couple of weeks.
The resurgence of shale production poses a direct challenge to OPEC's attempt to rebalance the global oil market while protecting its market share.