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OPEC+ unlikely to agree bigger oil cuts on Sunday, sources say

cde.news desk 2 June 2023, 19:00 · 2 min read

epa05152578 (FILE) A file picture dated 03 July 2001 showing the OPEC logo and signage in Vienna, Austria. The Organization of the Petroleum Exporting Countries (OPEC) increased its total oil production by 131,000 barrels per day (bpd) in January even though oversupply has been a major reason for falling oil prices, according to data issued by the cartel on 10 February 2016. The Vienna-based group of mostly Arab, African and Latin American countries said that they pumped 32.3 million bpd last month. This was 1.8 million bpd above the projected average demand for OPEC oil in the first quarter, the group's monthly oil market report showed. Saudi Arabia and other Arab members of OPEC have so far stopped the group from propping up prices by lowering output, in an apparent effort to use the current slump to win market shares from the US, where oil production is costlier than in the Gulf. EPA/BARBARA GINDL AUSTRIA OUT

By Maha El Dahan, Alex Lawler and Ahmad Ghaddar

VIENNA, June 2 (Reuters) – OPEC and its allies are unlikely to decide on further oil supply cuts at a meeting on Sunday despite a fall in oil prices toward $70 per barrel this week, two sources from the alliance said on Friday although another said the outcome was still unclear.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world’s crude, meaning its policy decisions can have a major impact on oil prices.

Two OPEC+ sources said they did not expect the group to agree further output cuts on Sunday, when OPEC+ ministers gather at 2 p.m. in Vienna (1200 GMT). Before then, OPEC ministers will meet at 11 a.m. on Saturday.

Saudi Energy Minister Prince Abdulaziz bin Salman and his counterparts from Algeria and the United Arab Emirates are among those expected to arrive in Vienna later on Friday, sources said.

As the economic outlook worsened, several members of OPEC+ in April pledged voluntary cuts starting from May, adding to a 2 million barrels per day (bpd) reduction agreed last year.

Another source said it was too soon to be sure of the outcome on Sunday, with bilateral talks between ministers expected ahead of the meeting. A fourth source said the idea of formalising the voluntary cuts as an OPEC+ decision was being looked at.

The surprise announcement in April helped drive oil prices LCOc1 about $9 per barrel higher to above $87 before retreating to trade around $75 on Friday, under pressure from concerns about global economic growth and demand.

Last week, Prince Abdulaziz told investors he said were shorting the oil price to “watch out”, which many market watchers interpreted as a warning of additional supply cuts.

But Russian Deputy Prime Minister Alexander Novak subsequently said he did not expect any new steps from OPEC+ in Vienna, Russian media reported.