LONDON: OPEC+ members that are making 2.2 million barrels per day of voluntary oil output cuts are discussing extending them until the end of the year, three OPEC+ sources said ahead of the group’s meeting on Sunday.
The voluntary cuts, which are due to expire at the end of June, are the latest in a series of OPEC+ cuts since late 2022 amid rising output from the United States and other non-member producers, and worries over demand as major economies grapple with high interest rates.
The Organization of the Petroleum Exporting Countries led by Saudi Arabia and allies led by Russia, known as OPEC+, will begin a series of online meetings at 1100 GMT on Sunday.
Two OPEC+ sources said another option was to extend the voluntary cuts only for the third quarter of the year. Two other sources said they would not rule out a deeper cut to support the market or releasing oil back into the market if OPEC+ decides demand was rising.
“We would not entirely rule out a plot twist – in the form of a deeper cut – given (Saudi energy minister) Prince Abdulaziz’s (bin Salman) penchants for Hollywood twist endings,“ said Helima Croft from RBC Capital Markets.
Prince Abdulaziz has repeatedly said he likes keeping the oil market on its toes and promised to punish speculators.
The OPEC+ group is currently cutting output by 5.86 million bpd, equal to about 5.7% of global demand.
The cuts include 3.66 million bpd by OPEC+ members valid through to the end of 2024, and the 2.2 million bpd of voluntary cuts by some members expiring at the end of June.
The countries which have made voluntary cuts that are deeper than those agreed with the wider group are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.
The OPEC+ meeting may coincide with a secondary share offering in oil giant Aramco on Riyadh’s Saudi Exchange – the culmination of a years-long effort to sell another chunk in one of the world’s most valuable companies after its record-setting IPO in 2019 raised $29.4 billion.
