Members of an OPEC and non-OPEC monitoring committee found producers cut their July output by 9 percent more than called for in their output reduction pact, two sources familiar with the matter said. This compared with a compliance level of 120 percent for June and 147 percent for May, meaning participants have been steadily increasing production.
The Organization of the Petroleum Exporting Countries and other producers led by Russia agreed in June to return to 100 percent compliance with oil output cuts that began in January 2017. This follows months of underproduction by Venezuela and other producers which cut output by 160 percent of the agreed target.
The committee groups representatives from Saudi Arabia, Russia, the United Arab Emirates, Kuwait, Algeria, Venezuela and Oman.
Prices have been buoyed in recent weeks by the view that the oil market will tighten when U.S. sanctions targeting OPEC member Iran's oil exports kick in November.
Iran has exported around 2.5 million barrels per day (bpd) of crude oil so far this year. Most analysts expect this figure to fall by at least 1 million bpd once sanctions kick in.
"While the Iranian sanctions issue certainly isn't new news, suggestions out of the White House that waivers will be restricted appeared to augment last week's price gains," said Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.