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OPEC panel recommends six-month extension of oil output cuts - source

Published 21/04/2017, 18:00
© Reuters. FILE PHOTO: A worker walks past a pump jack on an oil field owned by the Bashneft company near Nikolo-Berezovka
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LONDON (Reuters) - An OPEC and non-OPEC technical committee recommended that producers extend a global deal to cut oil supplies for another six months from June, a source familiar with the matter said, in an effort to clear a glut of crude that has weighed on prices.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market.

Compliance numbers were also reviewed at the meeting in Vienna on Friday that comprised of officials from countries monitoring adherence to agreed output levels, namely OPEC members Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman.

Overall compliance with pledged cutbacks stood at 98 percent in March, a source said. Two sources said the rate in March represented an increase from February's level.

Oil prices still declined on Friday, with Brent crude trading below $52 a barrel on concerns that increasing U.S. production and high inventories would thwart the efforts by OPEC and its allies to curb supplies.

The committee's recommendation that the supply cut deal be extended was not a surprise, after oil ministers from top exporter Saudi Arabia and Kuwait gave a clear signal on Thursday that producers planned to prolong the accord.

Russian Energy Minister Alexander Novak said on Friday a decision on extending the pact had not yet been taken, but would be discussed with OPEC on May 24. OPEC ministers plus their non-OPEC counterparts are scheduled to meet on May 25.

The meeting also discussed OPEC's own compliance, which it put at 103 percent, in line with figures published in OPEC's most recent monthly report.

The panel, which met at OPEC's Vienna headquarters, is the Joint Technical Committee (JTC) established in January to monitor adherence to supply cuts.

© Reuters. FILE PHOTO: A worker walks past a pump jack on an oil field owned by the Bashneft company near Nikolo-Berezovka

Top OPEC producer Saudi Arabia is also a member of the JTC in its capacity as 2017 OPEC president.

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