OPEC monitoring committee calls for 9-month extension to output deal

OPEC and non-member oil producers in last year’s output agreement should extend the agreement by another nine months, starting July 1, the committee monitoring compliance to the deal recommended on Wednesday.

The Joint Ministerial Monitoring Committee (JMMC) was formed after OPEC and other major exporters, including Russia, agreed to slash production by a combined 1.8 million barrels per day (bpd) in December in an attempt to shore up prices and rebalance global oil markets.

“The JMMC took note of the current market conditions, including the level of global inventories, and concluded that it is necessary to extend the production adjustments,” the committee said in a statement.

Countries participating in the deal achieved a conformity level of 102 percent as of April, an increase of 4 percentage points over the March 2017 performance, the note added.

OPEC and other major non-OPEC oil producers are meeting today in Vienna to discuss the future course for the output agreement.

If the deal is extended during today’s meeting, as is widely expected, JMMC will continue monitoring conformity levels as well as market conditions, the panel said.

The committee’s next meeting is scheduled to be held in July in Russia.

A number of participating members, including Saudi Arabia and Russia, have already voiced their support for extending the agreement.

Analysts said the markets will now be watching for the duration of the extension and any possible tightening of the output ceiling.

Crude oil prices rose further on Thursday in anticipation of the extension. Global benchmark Brent crude was last trading up 0.9 percent at $54.42 per barrel (bbl), while WTI crude gained 0.8 percent to reach $51.77/bbl.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com