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OPEC, Russia Said To Announce Oil Pact Extension On Nov 30

OPEC

Saudi Arabia and Russia have agreed that OPEC and non-OPEC allies should announce an extension of the cuts at the highly-anticipated meeting in Vienna on November 30, Bloomberg reported on Friday, quoting people involved in the talks.

Recent OPEC/non-OPEC oil pact chatter had it that Saudi Arabia was pushing for an announcement of the cuts extension next week in Vienna, while Russia was more hesitant about telling the market on November 30 how the participants in the deal would act. Russia appeared to be stalling and playing for an announcement to be issued closer to the current expiration deadline of the deal, March 2018.

According to Bloomberg’s sources, now Russia and Saudi Arabia have agreed on the need to announce some sort of a deal next week, but Russia has insisted on additional phrasing in the extension deal that would link the size of the cuts to the state of the oil market.

While OPEC and Russia have agreed on a general framework, discussions are ongoing as to how OPEC could meet Russia’s demands, including how to include a link between the size of the cuts and the state of the rebalancing of the oil market. There are also discussions about including an option to review the pact again in early 2018, including calling a new meeting, according to Bloomberg’s sources.

As of last week, not all Russian oil companies were on board with extending the cuts, and they were said to have discussed a six-month extension with Energy Minister Alexander Novak.

Related: Oil Major: 70% Of Crude Can Be Left In The Ground

Novak, for his part, said on Friday in a television interview posted on the energy ministry’s website that some 50 percent of the global oil oversupply had been erased and Brent prices had risen to an “acceptable enough” level of more than $60 a barrel.

Nevertheless, the oil market is not yet balanced and the pact needs to be extended, Novak said, adding that Russia supports an extension, and various options are being discussed. Details will be discussed at the Vienna meeting next week, he noted.  

By Tsvetana Paraskova for Oilprice.com

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  • Gil Martin on November 27 2017 said:
    The US is in panic mode as a oil price increase threatens its economy. OPEC, Saudi Arabia and Russia will not continue to bolster the US's economy with the theft of this precious commodity.

    Shale oil has little demand as current refineries cannot process it. Surfer levels to high, it should be given it's own price on the world market.
  • Peter Novak on November 26 2017 said:
    The Russians are eating the Saudi's lunch - taking over their market share all over Asia and Europe, and they are about to start production from several new fields as well as shale. Yes, Russian shale . . . .

    The Saudis are desperate to keep the oil price high so that they can get the ARAMCO IPO off . . . . .
  • Kr55 on November 24 2017 said:
    Saudi's must be working hard on their relationship with Russia. Worth their while because they are going to make Russia choose a side one day when they finally go after Iran.

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