• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 7 minutes The Secret China Iran Oil Deal At The Heart Of One Belt One Road Project
  • 11 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 15 minutes A Million Tesla Semi Trucks can replace 3 million barrels of oil per day?
  • 1 day Trump Suggests Delaying Election Amid Fraud Claims
  • 34 mins Trump Hands Putin Major Geopolitical Victory
  • 1 day Rational analysis of CV19 from Harvard Medical School
  • 2 days The World is Facing a Solar Panel Waste Problem
  • 36 mins Why No One Has Started a Thread on Portland
  • 10 hours Mask Disposal
  • 8 hours "The Great Reset" What does this mean for you.
  • 12 hours Pompeo upsets China; oil & gas prices to fall
  • 13 hours You may all go to hell
  • 13 hours Biden admits he has been tested for Cognitive Decline several times. Didn't show any proof of test results.
  • 2 days Trump is turning USA into a 3rd world dictatorship
Russia’s Central Bank Against Copying Mexican Oil Hedge

Russia’s Central Bank Against Copying Mexican Oil Hedge

Russia’s central bank doesn’t think…

Second Wave Of COVID-19 Won’t Crush Oil Prices

Second Wave Of COVID-19 Won’t Crush Oil Prices

Oil producers have adjusted production…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Pro-Extension Voices In OPEC Become Louder

In a statement, the joint committee of seven oil ministers from the parties to the cut said that the deal could be extended for another six months, depending on how oil’s fundamentals look in June. An earlier version of the statement, however, had the committee recommending the extension, according to Reuters.

The committee, which was set up to monitor the progress of the cuts and compliance rates, met in Kuwait over the weekend to review the situation. Its members commended the participants for their high rate of compliance – 94 percent as of February – and urged them to strive for 100 percent.

It seems that even a maximum compliance rate won’t change prices much, as U.S. inventory builds and rising production from the shale patch continue to offset the cuts already made by OPEC and its partners. Moreover, not everyone is on board with the extension idea. Russia, for one, said it needed more data before it considered such a move.

The effect of an extension could achieve the opposite of what OPEC needs, which is consistently higher prices, preferably above $60 a barrel. Yet the moment the initial deal was struck and prices started to climb, U.S. shale boomers buckled down and worked to boost their output, offsetting the cuts.

A deal extension would probably lift prices from their sub-$50 level, and that would again motivate shale boomers to continue pumping more and more – U.S. total crude output is set to exceed 9.5 million barrels daily next year, hitting and average of 10 million bpd at the end of that year, according to the EIA. Related: Energy Market Deregulation: Be Careful What You Wish For

Still, the OPEC committee argued that the current dip in prices was caused by lower seasonal demand and refinery maintenance season. Prices should perk up after the end of this maintenance season, and crude inventories in floating storage should shrink, as well.

All OPEC ministers are meeting again on May 24, when the extension is likely to be discussed.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Johnny on March 27 2017 said:
    Extension is not enough.Market needs additional 1-1.5m cut.This OPEC production level with increasing US and non OPEC production is good for 40-50 $ per barrel what is not enough.60$ per barrel is magic number.We must reach 60$.OPEC must cut more and US increasing must slow down.It is very simple....or not.

Leave a comment




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