OPEC will soon discuss with Russia a new way to measure oil inventories as producers meet to review their supply-cuts agreement that expires at the end of 2018.
Oil producers involved in the supply reductions, which have helped lift crude prices to three-year highs, will discuss which inventory levels to consider when they meet in April, Saudi Arabia Energy Minister Khalid Al-Falih told reporters in Riyadh on Wednesday. More coordination is needed to assess inventories, Russian Energy Minister Alexander Novak said at the same meeting.
Russia, OPEC and their allies first committed to output cuts in November 2016 to reduce global inventories to their five-year average. They extended the limits last November, and crude stockpiles in industrialized nations have shrunk to the lowest since 2014. The inventories were about 52 million barrels above the five-year average in December, a drop of 80 percent from a year earlier, according to the International Energy Agency.
One possible new measurement would be to assess how long existing inventories would meet demand, or forward-day cover, Al-Falih said. Finding reliable data for inventories remains a challenge, he said.