IEA: OPEC is sticking to its agreement to cut oil production like never before

The Organization of Petroleum Exporting Countries (OPEC) has received an early and key endorsement of its effort to reduce the global oversupply of oil.

On Friday, the International Energy Agency - a global energy watchdog - said OPEC had achieved 90% compliance with its agreement last year to lower production. Saudi Arabia, the IEA said, appeared to cut more than was agreed on at the meeting with some key non-OPEC members in November.

The IEA's oil market report for February said, "While seaborne oil export data, from which secondary source estimates of OPEC production are mainly derived, are not complete for January and is subject to revision, OPEC nevertheless appears to have made a solid start to what is a six-month process. This first cut is certainly one of the deepest in the history of OPEC output cut initiatives."

Brent crude, the international benchmark of oil prices, approached the highest level in over a year after the IEA's report, gaining 1.9% to $56.73 per barrel. West Texas Intermediate crude oil futures, the US gauge, climbed 1.6% to $53.84 per barrel.

Saudi Arabia, which is ostensibly OPEC's leader, stands to gain from the bump in oil prices that lower production levels could stimulate. Besides a fiscal boost, it is eyeing a 2018 initial public offering - which would be the world's largest - for its state-owned oil company Aramco.

On non-OPEC producers who were part of the deal, the IEA said that based on incomplete data, Russia cut output by 100,000 barrels per day. It's on track to gradually hit its target of 300,000. Oman lowered output in line with its commitment,. while Kazakhstan was cutting more than it agreed to, the IEA said.

However, the solution to the oil market's imbalance still rests heavily on US shale producers.

"US shale is coming back, and it's coming back strong," said Mark Keenan, a commodity strategist at Societe Generale, in a recent note. He cited the rise in rig counts and improving job growth in the energy sector as part of the evidence for this.