Update:
The oil market will need more crude from Libya and Nigeria as it re-balances, the Opec secretary general Mohammad Barkindo said.
Compliance with production cuts by members of Opec is “excellent,” Mr Barkindo said in St Petersburg, Russia. Libya and Nigeria are exempt from the cuts and have been boosting production, leading to speculation about whether Opec will seek to cap their output to help reduce a global glut.
Brent crude prices have declined 15 per cent this year on concerns that growing output in Libya and Nigeria, as well as the United States, is more than making up for production cuts by Opec members and other oil producers, including Russia. Saudi Arabia’s energy minister Khalid Al Falih and Russia’s energy minister Alexander Novak are scheduled to attend a meeting in St Petersburg Monday to discuss the progress of their agreement to trim output.
A rebalancing of the oil market is progressing more slowly than expected, but it will speed up in the second half of the year, Mr Barkindo said on Sunday.
"We are pretty sure that the rebalancing process may be going at a slower pace than earlier projected, but it is on course. It is bound to accelerate in the second half," he said.
Mr Barkindo cited strong oil demand growth, conformity with a global pact by Opec and non-Opec countries to cut output as well as an inventory draw in the US as reasons why a rebalancing of the oil market would accelerate.
Speculation has been swirling in oil markets that the meeting might ask Libya and Nigeria to join the production cutting deal from which they are currently exempt.
Six Opec and non-Opec ministers will meet on Monday in St Petersburg to discuss the market outlook and compliance with output cuts.
Russia's energy minister Alexander Novak said on Sunday Russian output had fallen by around 300,000 barrels per day since October.