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OPEC meets to extend oil cuts for up to one year

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OPEC meets to extend oil cuts for up to one year

OPEC and non-member oil producers are gearing up to extend output cuts on Thursday, possibly by as long as 12 months, to help clear a global stocks overhang and prop up crude prices.

Axar.az reports citing Reuters.

The Organization of the Petroleum Exporting Countries is to discuss in Vienna whether to prolong an accord reached in December in which it and 11 non-members agreed to cut oil output by about 1.8 million barrels per day in the first half of 2017.

Most OPEC ministers, delegates and the market see a nine-month extension - instead of the initially suggested six months - as the base-case scenario but some countries including Russia have suggested an unusually long duration of 12 months.

"I think nine months is most likely," one OPEC delegate said. Four other delegates agreed it was the most probable outcome.

OPEC's de facto leader, Saudi Arabia, and top non-OPEC producer Russia have said cuts need to be extended to speed up market rebalancing and prevent oil prices from sliding back below $50 per barrel.

OPEC sources have said the Thursday meeting will also highlight the need for long-term cooperation with non-OPEC producers.

The group could also send a message to the market that it will seek to curtail its oil exports, which have not declined as steeply as its production.

Date
2017.05.25 / 12:59
Author
Axar.az
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