Ahead of the OPEC+ Sunday meeting, Reuters has cited three unnamed cartel sources as saying that a rollover to the end of the year of the existing 2.2 million barrel-per-day voluntary oil production cuts is currently being discussed.
Analysts have been expecting OPEC+ to maintain the status quo on Sunday, and Reuters' Thursday report is in line with those expectations.
The voluntary cuts expire at the end of JUne, and OPEC+ launches its meetings on Sunday at 1100 GMT.
Through the end of this year, OPEC+ members have agreed to 3.66 million bpd in cuts, plus the 2.2 million bpd in voluntary cuts that are separate and set to end at the close of June. In total, the cuts equal just under 6% of global oil demand, with Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the UAE participating in the voluntary cuts.
According to two of Reuters' sources, there is also an alternative option being discussed, which would include extending voluntary output cuts for a shorter period, through the third quarter of this year, while two separate sources told Reuters that an even deeper cut could possibly be instituted in an attempt to balance the market. At the same time, more oil could be back on the books if demand appears to be rising.
Saudi Energy Minister Prime Abdulaziz bin Salman has a flair for the unexpected.
Reuters cited RBC Capital Markets' Helima Croft as saying we shouldn't rule out a "plot twist - in the form of a deeper cut - given Prince Abdulaziz's penchants for Hollywood twist endings."
Yet, earlier this week Patterson and Manthey wrote that "Members are expected to fully roll over their additional voluntary cuts. High expectations of a full rollover mean that OPEC+ needs to ensure it does not disappoint the market, otherwise, it risks an aggressive pullback in prices."
By Josh Owens for Oilprice.com
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Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and… More
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