• 4 minutes End of Sanction Waivers
  • 8 minutes California Politicians Hiked Gas Tax, Now Demand Investigation Into State's $4 Per Gallon Gas Prices
  • 11 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 15 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 2 hours Permafrost Melting Will Cost Us $70 Trillion
  • 5 mins California is the second biggest consumer of oil in the U.S. after Texas.
  • 4 hours Let's just get rid of the Jones Act once and for all
  • 22 mins Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 2 hours Saudi, UAE Overstate Their Oil Capacities?
  • 23 hours At Kim-Putin Summit: Theater For Two
  • 2 hours Robots And Emotions: Simulated Love Is Never Love
  • 23 hours NAFTA, a view from Mexico: 'Don't Shoot Yourself In The Foot'
  • 20 hours "Undeniable" Shale Slowdown?
  • 1 day UNCONFIRMED : US airstrikes target 32 oil tankers near Syria’s Deir al-Zor
  • 1 day Nothing Better than Li-Ion on the Horizon
  • 1 day New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 1 day Russia To Start Deliveries Of S-400 To Turkey In July
Alt Text

Oil Markets Set For Further ‘’Disruption’’

Increased volatility has led to…

Alt Text

Oil Could Fall To $40 If OPEC Abandons Its Deal

Russia has announced that the…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

More Info

Trending Discussions

OPEC Favors 9-Month Extension Of Production Cut Agreement

OPEC favors a nine-month extension to the OPEC/NOPEC production cut deal, according to four anonymous Reuters sources, which would push out the agreement until December 2018.

The possibility of extending the cuts through end 2018 has been discussed before, and OPEC has been saying for quite some time that OPEC would be willing to do “whatever it takes” to balance the oil market.

Still, OPEC has been reluctant to commit to anything beyond the existing agreement, which holds production at 32.5 million bpd for OPEC members—a 1.2-million bpd decrease from production levels in October 2016.

OPEC is now tasked with managing expectations—something it failed to do in May when it decided to extend the original deadline for the cuts through March 2018. At that time, the market was expecting—or rather hoping for—not only an extension, but a deepening of the cuts, and when the deepening didn’t materialize, the mere extension failed to impress the market, and therefore failed to lift the price of oil.

Iran, for one, is on board with an extension, but it’s hardly too much skin off their nose, as under the current deal, Iran is capped at a figure higher than its October production, as its astute negotiations allowed it to recover at least to some extent its oil production that had been stifled due to sanctions.

While Iran’s support of the deal is helpful, the real heavyweights—Saudi Arabia and Russia—serve as the backbone of the deal, and their buy in is crucial.

Three of the four sources added that the pushback until end 2018 is the likely outcome—the third reportedly merely said that a six- to nine-month extension would be necessary to deplete the current overhang.

Related: Major Energy Importer Bets $10 Billion On Natural Gas

But the word on the street that OPEC is favoring a second extension to the agreement is tempered somewhat, according to sources, who say that the decision on whether to extend may not take place in November 2017 as many had thought; the decision may be waylaid until early 2018, supported by the stronger demand growth for oil.

As for a deepening of the cuts—something the market would rejoice over—this is unlikely, Reuters sources said, because some of the necessary players would be unable to reduce production further.

“My belief is that the ministers will renew until stocks go back to normal,” one of the sources said.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News