The Organisation of Petroleum Exporting Countries, OPEC, is considering a six or nine-month extension in reduction of crude output, PREMIUM TIMES has gathered.
An OPEC panel reviewing scenarios for the oil producer group’s meeting next week is looking at the options in an attempt to drain inventories and support prices.
The oil producers also aim to facilitate a deeper cut in output, OPEC sources told Reuters on Friday.
Already, Saudi Arabia and Russia, a
non-OPEC state – both world’s top two oil producers – have agreed on the need to prolong the current cuts until March 2018.
But Saudi Energy Minister, Khalid al-Falih, said extended curbs would be on the same terms.
OPEC’s national representatives and officials from its Vienna secretariat met on Wednesday and Thursday, sources said.
Their panel, the Economic Commission Board, was due to conclude talks on Thursday, but they finally ended on Friday, OPEC sources added.
Among the scenarios being considered by the panel are a six or nine-month extension with a possible deeper cut, reports said.
“All options are open,” an OPEC source said, adding that a deeper cut in output was an option depending on estimated growth in supply from non-OPEC producers, mainly U.S. shale oil firms, among other scenarios.
The ECB does not set policy and its meeting precedes the gathering of OPEC and non-OPEC oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output.
On Friday, oil prices headed for a second week of gains, trading above $53 a barrel, on growing expectations that producers would agree further steps to support the market when they meet next week.
In November 2016, OPEC, Russia and other producers originally agreed to cut production by 1.8 million barrels per day for six months from January 1.
Nigeria, Africa’s largest economy, relies on oil proceeds as its main revenue source.
The nation looks forward to an extension of the output cut by members of the oil producers’ group, Ibe Kachikwu, the minister of petroleum, said in May.
Oil prices have gained support from reduced output but high inventories and rising supply from producers not participating in the accord – particularly U.S – have limited the rally, pressing the case for extending the curbs.
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