May 22 (UPI) -- Crude oil inventories are on the decline and there is "some light at the end of the tunnel" for OPEC's market balancing effort, its secretary general said.
Parties to a multilateral effort to offset the high level of crude oil supplies on the market through managed production declines meet in Vienna later this week to review the terms of the arrangement. The Organization of Petroleum Exporting Countries is leading the initiative with support from non-member producers like Russia.
Speaking from the sidelines of a joint summit with officials from New Delhi, OPEC Secretary General Mohammad Barkindo said compliance so far has been high and the results are evident.
"Inventory levels are falling," he said. "Moreover, we are also seeing numbers from industry stating that crude in floating storage has fallen by over 40 million barrels since the beginning of the year."
Strong production figures from the United States left the market flush with oil when OPEC members under a previous policy were defending their market share with more oil. This year, the International Energy Agency said the market was "almost balanced," though recent trends suggest balance is slow to emerge.
Two weeks ago, the U.S. Energy Information Administration reported crude oil inventories in the United States, the world's largest economy, declined by more than 5 million barrels, though last week's draw was closer to 2 million barrels.
Nevertheless, OPEC's secretary general said crude oil inventories in the United States have declined for six weeks in a row. Outside the United States, he said, the decline in commercial stockpiles of oil was broadly on track.
"In terms of where we view this process today, to put it simply, we are seeing some light at the end of the tunnel," he said in his prepared remarks.
Overall production from non-OPEC members, including about a dozen that are party to the multilateral production arrangement, is expected to grow by 600,000 barrels per day this year. Parties to the OPEC-led effort are coordinating around an agreement to extend the deal by at least six more months.