Opec and its allies were close to an agreement to extend their oil-production cuts for another nine months as they seek to prop up prices and revive their economies.
While ministers gathering in Vienna still planned to discuss other options”•a shorter deal for six months or curbs lasting for the whole of next year”•consensus was building around an agreement that runs through March 2018.
“At this moment, I think we have an agreement do nine months,” Algeria’s Energy Minister Noureddine Boutarfa told reporters in Vienna on Tuesday. “But tomorrow perhaps we’ll have another proposition.”
The Organization of Petroleum Exporting Countries and 11 non-members agreed last year to cut output by as much as 1.8 million barrels a day. The supply reductions were initially intended to last six months from January, but the slower-than-expected decline in surplus fuel inventories prompted the group to consider an extension. The most influential members of the deal, including Russia and Saudi Arabia and Iraq, have publicly backed supply curbs lasting until March 2018 to finally clear the glut.
“Not everybody” is on board yet for nine months, Kuwait’s Oil Minister Issam Almarzooq told reporters Tuesday, before leaving his country for Vienna. Kazakhstan and Iran are among the nations not to have expressed a view in public.
A committee of six Ope and non-Opec nations charged with ensuring successful implementation of the cuts will meet on Wednesday morning to study the merits of a 12-month extension, in addition to the six and nine-month durations already discussed publicly, according to delegates familiar with the matter. No participant in the agreement has publicly backed another 12 months.
Representatives of Kuwait and Oman said the group isn’t considering deeper cuts.
If Opec maintains its April crude production of 31.8 million barrels a day throughout the rest of the year, the decline in oil stockpiles will accelerate, according to the International Energy Agency.
The deal “has been working and I know it will work even better for the second half,” United Arab Emirates Energy Minister Suhail Al Mazrouei said on Tuesday on the sidelines of a conference in Abu Dhabi. “We need to give the market some more time.”