Date
20 August 2017
Kuwait Oil Minister Ali Al-Omair opens the OPEC second Joint Ministerial Monitoring Committee meeting in Kuwait. Photo: Reuters
Kuwait Oil Minister Ali Al-Omair opens the OPEC second Joint Ministerial Monitoring Committee meeting in Kuwait. Photo: Reuters

OPEC, non-OPEC weigh 6-month extension of oil output cut

A joint committee of ministers from OPEC and non-OPEC oil producers has agreed to review whether a global pact to limit supplies should be extended by six months, Reuters reports, citing a statement.

An earlier draft of the statement had said the committee “reports high level of conformity and recommends six-month extension”.

But the final version said only that the committee had requested a technical group and for the OPEC Secretariat to “review the oil market conditions and revert … in April 2017 regarding the extension of the voluntary production adjustments”.

Oil sector analysts said the lack of an immediate extension could drag on crude prices.

“The dropping of the recommendation to extend cuts in favor of technical review committee is likely to lead to a lot of disappointment and potential further liquidation of long positions by money managers that will put downward pressure on oil prices,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas in London.

It was not immediately clear why the wording had been changed, although a senior industry source said the committee lacked the legal mandate to recommend an extension.

The Organization of the Petroleum Exporting Countries and rival oil-producing nations were meeting in Kuwait to review progress with their global pact to cut supplies.

OPEC and 11 other leading producers including Russia agreed in December to cut their combined output by almost 1.8 million barrels per day (bpd) in the first half of the year. The original deal was to last six months, with the possibility of a six-month extension.

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RA

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