OPEC and its allies led by Russia on Thursday were moving closer to agreeing one of the deepest output cuts this decade to support crude prices and prevent a glut, sources from OPEC said.
The Organisation of the Petroleum Exporting Countries (OPEC) meets on Thursday in Vienna and with Russia and others, a grouping known as OPEC+, on Friday.
Three OPEC+ sources said on Thursday the group would discuss increasing current cuts of 1.2 million barrels per day by more than 400,000 bpd.
The current cuts expire in March and OPEC+ sources and delegates have said the new deal could be extended to June or until the end of 2020.
OPEC+ has curbed supply since 2017 to counter booming output from the U.S., which has become the world’s biggest producer.
In 2020, rising production in the U.S. and other non-OPEC countries such as Brazil and Norway threaten to add to the glut.
OPEC’s actions in the past have angered U.S. President Donald Trump, who has repeatedly demanded OPEC’s de facto leader Saudi Arabia brings oil prices down if it wants Washington’s to provide Riyadh with military support against arch-rival Iran.
In the past few months, Trump has said little about OPEC but that might change later in 2020 if oil and gasoline prices raise – a politically sensitive issue as he seeks re-election in November.
Washington’s ongoing trade dispute with China has also clouded the economic and therefore oil demand outlook for 2020.
Iraq, OPEC’s second-largest producer, said on Tuesday OPEC de facto leader Saudi Arabia was supporting cuts of 1.6 million bpd, or 1.6 per cent of global demand.
Saudi Energy Minister Prince Abdulaziz bin Salman said he “feels good” about this week’s meetings but declined to comment on policy matters in Vienna.
Russian Energy Minister Alexander Novak told Prince Abdulaziz on Thursday that Russia-Saudi energy cooperation should continue, his ministry reported.
Oil minister Bijan Zangeneh of Iran, which is exempt from the cuts, said he would support a deeper cut if that was agreed by other producers. (dpa/NAN)