OPEC and Non-Members Considering 9 Month Extension

OPEC and non-member oil producers are considering extending a global supply cut for nine months or more to avoid a price-sapping output increase in the first quarter of next year, when demand is expected to be weak, OPEC and industry sources said.

The Organization of the Petroleum Exporting Countries, Russia and other producers agreed last year to curb production by 1.8 million barrels per day for six months from Jan. 1.

Oil prices have gained support but global inventories remain high, pulling crude LCOc1 back below $50 a barrel and putting pressure on OPEC to extend the cuts through the rest of 2017.

Production from countries not participating in the deal, such as the United States, has also been rising, keeping crude below the $60 level that OPEC kingpin Saudi Arabia and others would like to see.

OPEC countries including core Gulf members are discussing internally whether an extension of nine months or longer is needed to give the market more time to rebalance, the sources said.

One industry source familiar with the talks said there had been discussions about extending curbs until the end of the first quarter of 2018, when crude demand should be seasonally weak.

via Reuters

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