OPEC, non-OPEC see need to extend output deal beyond June

OPEC and non-member oil producers that jointly agreed to cut crude production last year are in agreement over the need to extend the pact beyond June, Reuters reported on Friday, citing Saudi Arabia’s OPEC governor Adeeb Al-Aama.

OPEC members led by Saudi Arabia, and non-members led by Russia, agreed in December to slash output by 1.8 million barrels per day (bpd) for six months starting Jan. 1, 2017. 

While the deal helped boost oil prices, gains were capped by rising output from countries that were not part of the agreement – such as the United States – which has kept crude prices below the $60 level.

"There's an emerging consensus among participating countries on the need to extend the production agreement reached last year," Al-Aama said, adding that the nations are yet to decide how long the deal should be extended for.

Last month, Saudi energy minister Khalid Al Falih said the agreement could be extended for three months and not necessarily six months, adding that reducing stocks was “top priority.”

A formal decision on the extension will be made when OPEC and non-OPEC members meet in Vienna on May 25.