Oil prices were slightly up early on Monday as the market was assessing the news that a panel of the OPEC+ allies is recommending that partners cancel a scheduled extraordinary meeting in mid-April, leaving the decision for the cuts extension for a meeting at the end of June instead.
At 08:46 a.m. EDT on Monday, WTI Crude was up 0.07 percent at $58.56, while Brent Crude was trading up 0.24 at $67.32, with both benchmarks recovering from losses earlier in the day.
"In consideration that market fundamentals are unlikely to materially change in the next two months, the JMMC adopted a recommendation to forego the full Ministerial Meeting in April and instead schedule a JMMC meeting in May ahead of the OPEC Conference meeting on 25 June, during which a decision will be taken on the production target for the second half of 2019," the Joint Ministerial Monitoring Committee (JMMC) said at the end of a meeting in Baku, Azerbaijan.
For several weeks, OPEC officials have been signaling that mid-April would have been too early to assess the actual impact of the sanctions on Venezuela and the U.S. policy on the waivers for Iranian oil customers, after the current waivers expire in early May.
"The consensus we heard ... is that April will be premature to make any production decision for the second half," Saudi Arabia's Energy Minister Khalid al-Falih said, as carried by Reuters.
"Looking at the current situation, market fundamentals have been slowly improving since the latter part of last year, but I would hasten to add that much more work still needs to be done," al-Falih said at the meeting in Baku.
Oil prices at their current levels are the "sweet spot" and the "pain threshold" of both OPEC and U.S. producers, Christyan Malek, head of EMEA Oil & Gas Research at JPMorgan, told CNBC on Monday.
Oil at above $65 a barrel triggers U.S. President Trump's unapologetic criticism of OPEC, while $65-70 oil is at the same time fairly okay for the fiscal situation of Saudi Arabia and other OPEC producers, according to Malek.
"They'd ideally like higher but it does feel like the sweet spot," he told CNBC.
According to JPMorgan's base-case scenario, OPEC and allies will extend the cuts into the second half of 2019.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More