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OPEC, Russia discuss extending oil cuts for one to two months - sources

Published 01/06/2020, 09:47
Updated 01/06/2020, 10:35
© Reuters. FILE PHOTO: The logo of the Organisation of the Petroleum Exporting Countries (OPEC) sits outside its headquarters in Vienna

By Rania El Gamal, Vladimir Soldatkin and Olesya Astakhova

DUBAI/MOSCOW (Reuters) - OPEC and Russia are moving closer to a compromise on extending current oil output cuts and are discussing a proposal to roll over supply curbs for one to two months, three OPEC+ sources told Reuters on Monday.

OPEC+ decided in April to cut output by a record 9.7 million barrels per day, or about 10% of global output, to lift prices battered by a demand drop linked to lockdown measures aimed at stopping the spread of the coronavirus.

Rather than easing output cuts in July, sources told Reuters last week that de-facto OPEC leader Saudi Arabia was leading discussions on sustaining them until the end of the year.

However, it was yet to win support from Russia, which believes curbs could be eased gradually.

"It is the proposal now, but it is yet to be finalised," one OPEC+ source said of the 1-2 month extension.

"It's for a month or two, not for half a year," one Russian oil source said, on the rollover of the existing cuts.

Another OPEC+ source said there was support for Russia's proposal for an extension of one month, but "we still do not have consensus over it".

The OPEC+ group is likely to hold an online meeting on June 4 to discuss output policy, after Algeria, which currently holds the presidency of the Organization of the Petroleum Exporting Countries (OPEC), proposed a meeting planned for June 9-10 be brought forward.

© Reuters. FILE PHOTO: The logo of the Organisation of the Petroleum Exporting Countries (OPEC) sits outside its headquarters in Vienna

Reduced production from OPEC+, combined with a record decline in output from non-members such as the United States and Canada, have helped to lift oil prices towards $35 per barrel, but they remain at only half the level of the start of the year.

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