Saudi Arabia is shipping less oil to customers. OPEC by February reduced daily output by 1 million barrels. Global inventories this year fell the most in a decade.
Credit Ali al-Naimi, oil minister of Saudi Arabia, the world's largest exporter, who told OPEC members that production cuts would stop a six-month decline in oil. Crude this year rebounded 26 percent from a 20-month low to $62.81 a barrel.
``We are happy with the level of compliance,'' Mohamed al- Hamli, president of the Organization of Petroleum Exporting Countries, said in an interview in Bangkok on March 22.
Oil has bounced around between roughly $57 - $62/barrel for the last few months. OPEC's production cuts should help to provide a floor for prices going forward.
The decline in inventories is also providing a floor for oil prices.
This is not good news for the Federal Reserve who are caught between stubbornly persistent inflationary pressures (in part caused by commodity prices) and slower growth.