NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

OPEC+ may meet over oil cuts this week if laggards agree to comply - sources

Published 04/06/2020, 10:23
Updated 04/06/2020, 15:25
© Reuters. FILE PHOTO: A 3D printed oil pump jack in front of the OPEC logo in this illustration picture

By Rania El Gamal, Olesya Astakhova and Alex Lawler

DUBAI/MOSCOW/LONDON (Reuters) - OPEC+ oil producers could still hold a ministerial video conference this week if Iraq and others which have not fully complied with existing supply cuts agree to boost their adherence, three OPEC+ sources told Reuters on Thursday.

The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, are debating when to hold ministerial talks to discuss a possible extension of the existing cuts.

OPEC+ agreed to reduce supply by 9.7 million barrels per day (bpd) during May and June, after the coronavirus crisis hit demand. Oil prices have more than doubled after tumbling below $20 a barrel in April, but OPEC+ indecision about whether to prolong those record cuts has weighed since Wednesday. [O/R]

Saudi Arabia and Russia, the key OPEC+ players, want to extend the existing level of cuts, but a suggestion by OPEC's current president Algeria to meet on Thursday was delayed amid talks about poor compliance by some producers.

"There are discussions between the ministers about the possibility of making up for poor May compliance in June and July," one OPEC+ source said, declining to be identified.

Iraq and Nigeria, both laggards in previous OPEC+ cuts, have shown lower compliance with the curbs implemented since May than OPEC producers in the Gulf, such as Saudi Arabia.

A ministerial conference could be called at short notice, possibly on Friday, if there was an agreement, the sources said.

Riyadh was preparing for tough talks, said SEB analyst Bjarne Schieldrop.

"Not only are cheaters being pushed to fully comply with the deal going forward, but they are also asked to make up for what they did not deliver," he said. "That sounds like a very tall order and our first reaction is this will never happen."

Producers are relieved supply cuts have offset the drop in demand caused by lockdowns to prevent the coronavirus spreading. Demand is recovering as those restrictions are eased.

Russian Energy Minister Alexander Novak has said the oil market could face a shortage of 3 million to 5 million bpd in July, depending on the deal reached by OPEC+, Interfax news agency reported.

© Reuters. FILE PHOTO: A 3D printed oil pump jack in front of the OPEC logo in this illustration picture

Kremlin spokesman Dmitry Peskov said President Vladimir Putin had no plans to speak to his U.S. counterpart Donald Trump or other heads of state on the issue, but said the oil market was stabilising in recent weeks.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.