Russia will be fully compliant with OPEC-led supply cuts by April, energy minister says

Russian Energy Minister Alexander Novak said on Sunday that Moscow will be fully compliant with OPEC-led supply cuts over the coming weeks.

"As far as the meeting is concerned we, of course, discussed the situation with the execution of the agreement (and) we stressed once again that Russia is discharging its obligations in accordance with the agreement to smoothly achieve the target output," Novak told CNBC's Dan Murphy in Baku, Azerbaijan, according to a translation.

"As for the target output level that forms part of the signed agreement, we plan to reach those figures by the end of March (or) beginning of April. This is earlier than in the same period two years ago by about one month."

His comments come three months into a fresh round of production cuts from the so-called OPEC+ alliance. The producers meet in mid-April to review their oil supply cut agreement, which is scheduled to last through the first-half of 2019.

The Middle East-dominated group, alongside non-OPEC allies such as Russia, agreed to reduce output by 1.2 million barrels per day (b/d) for six months.

OPEC's share is 800,000 b/d, to be delivered by 11 members — with Iran, Venezuela and Libya exempt from cuts.

When asked whether Russia would support an extension to the cuts, Novak replied: "It is a little premature to talk about this. The deal after all covers the first six months of the year so any extension will be discussed in May or June this year."

Compliance rates should improve "very soon"

Saudi Arabia's Energy Minister, Khalid al-Falih, said on Sunday he was "optimistic" about the prospect of continued commitment to the OPEC-led production cuts.

The compliance rates in the first two months of the year are less than levels seen in 2017 and 2018. But, al-Falih told reporters on the sidelines of the joint ministerial monitoring committee meeting in Baku that he expected oil producers would "catch up very soon."

The 2019 pact was a dramatic turnabout for OPEC and its allies, after the producer group had agreed to boost supplies in mid-2018. OPEC+ changed course after Brent crude futures tumbled from $86 a barrel in October, making them wary of a supply glut.

"There are still a lot of uncertainties in the markets linked to the decisions being taken regarding sanctions against certain countries that we consider a wrong move, going against market interests and in breach of international norms and international law," Novak said, referencing U.S. crude sanctions against Venezuela and Iran.

"This impacts the market and should be borne in mind. We are a very capital-intensive sector, we require solid investments, long term investments, so all this should be borne in mind when any decisions are taken."

International benchmark Brent crude settled at $67.16 on Friday, little changed from the previous session, while U.S. West Texas Intermediate (WTI) dipped 0.4 percent to close at $58.39.

So far this year, the price of Brent crude has climbed nearly 20 percent, while WTI has jumped more than 21 percent over the same period.