Saudi Arabia expects oil producers to extend output cuts into 2019

OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories to desired levels, Reuters reported, citing Energy Minister Khalid al-Falih.

OPEC and non-OPEC countries struck an output deal in January 2017 to remove 1.8 million barrels per day from global markets and end a supply glut. The deal helped lift oil prices to current levels of around $65 per barrel.

The oil producers will convene in June in Vienna to discuss further cooperation.

“We know for sure that we still have some time to go before we bring inventories down to the level we consider normal and we will identify that by mid-year when we meet in Vienna,” Al-Falih told Reuters in an interview in Washington on Thursday.

“And then we will hopefully by year-end identify the mechanism by which we will work in 2019,” he said, adding that it was unclear what oil supplies would need to be in 2019.

Falih said on Thursday there is a general acceptance among producers that further coordination “does not necessarily mean maintaining the same level of cuts. It just means that the mechanism has worked and they have committed to work within that mechanism for a much longer period.”