OPEC, non-OPEC to consider extending output cut by 6 months

Members of OPEC and other producers from outside the oil cartel have achieved a compliance rate of 94 percent with the supply cut deal in February, an increase of 8 percentage points when compared to January.

However, the positive impact of lower output was offset by several factors, including a decline in seasonal demand, refinery maintenance, and rising non-OPEC supply, the Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) said in a statement Sunday.

The JMMC has asked the Joint OPEC/Non-OPEC Technical Committee (JTC) and OPEC to review oil market conditions and submit the necessary recommendations in April to extend the output cut deal by another six months.

“It was felt that the end of the refinery maintenance season and a noticeable slowdown in the US stock-build, as well as the reduction in floating storage, will support the positive efforts undertaken to achieve stability in the market,” JMMC added.

“This reaffirms the commitment of OPEC and participating non-OPEC countries to continue to cooperate for the benefit of producers and consumers alike, as has been consistently advocated,” the statement added.

In December, OPEC agreed with 11 non-member producers, including Russia, to reduce production by a combined 1.8 million barrel a day for a period of six months. The deal was part of efforts to rebalance the market and boost oil prices, which have more than halved since late-2014.