Iran's OPEC governor said Tuesday the organization's current crude oil production levels "support the market" due to members' high compliance but changes in the global economic outlook may warrant further group action.
"Why have prices improved during the last three months? Because everybody believes OPEC is serious about adjusting production to the demand side," Mohammad Ali Khatibi told Dow Jones Newswires by phone Tuesday.
Organization of Petroleum Exporting Countries members' "believe that compliance is actually much higher than 80%," Khatibi said.
OPEC has announced three production cuts since September to take a total 4.2 million barrels a day of crude out of the market in a bid to reverse an oil price slump of as much as $100 a barrel from record highs in July to below $40 a barrel late last year. Crude prices have since recovered to levels of about $50 a barrel.
The front-month May light, sweet, crude contract on the New York Mercantile Exchange was trading $0.60 higher at $50.65 a barrel at 1130 GMT Tuesday.
"After OPEC's decision in Oran, the oil price improved very significantly. OPEC feels that this level of production is good for the market," Khatibi said. "This production level can support the market."
According to a Dow Jones survey based on input from oil traders, analysts and industry sources published in early April, OPEC cut production by a total 3.49 million barrels a day since September, indicating a compliance rate of 83%.