OPEC Gets a Surprise After Oil Cuts: Higher Stockpiles

When OPEC and Russia meet next month to assess the impact of their oil cuts they face a surprising outcome: stockpiles are even higher than when they started.

Inventories have started to decline, but by the time ministers gather in Vienna on May 25, developed nations still won’t have burned through the big stockpile increase caused by a surge in OPEC output just before the cuts came into force, data from the International Energy Agency indicate.

The Organization of Petroleum Exporting Countries has been “hoisted by its own petard” by agreeing in principle to reduce production last September while allowing members to keep boosting sales until the deal took effect on Jan. 1, Citigroup Inc. said. While the group has fully implemented its pledged cuts, that’s being offset by U.S. shale oil producers buoyed by price gains, according to Commerzbank AG. Read More…