OPEC compliance eroding; US drivers may rev up-IEA

DARWIN (Reuters) – The Organization of Petroleum Exporting Countries (OPEC) members’ compliance with production curbs they reaffirmed last week is eroding as prices rise, the International Energy Agency (IEA) said on Monday.

Richard Jones, deputy executive director of the West’s energy watchdog, also said that OPEC would not be justified in cutting output, despite still-swollen global oil stocks, and that the strength of U.S. demand this summer could surprise analysts.

OPEC agreed last Thursday to stick with existing production targets as oil prices climbed 30 percent in May, their biggest monthly gain in a decade. U.S. light, sweet crude futures rallied another $1 to trade at a seven-month high over $67.

“Compliance with OPEC production restrictions is declining,” he said at a petroleum conference in the northern city of Darwin.

Reuters