Oil producers likely to extend output cuts deal by 6 months

A technical committee of OPEC and non-OPEC members recommended that oil producers extend a global deal to cut oil supplies for another six months from June, in an effort to clear a glut of crude that has weighed on prices, Reuters quoted a source familiar with the matter as saying.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from 1 January to support the market.

Compliance numbers were also reviewed at the meeting in Vienna on Friday that comprised of officials from countries monitoring adherence to agreed output levels, namely OPEC members Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman.

Overall compliance with pledged cutbacks stood at 98 per cent in March, a Reuters source said. Two sources said the rate in March represented an increase from February's level.

Oil prices still declined on Friday, with Brent crude trading below $52 a barrel on concerns that increasing US production and high inventories would thwart the efforts by OPEC and its allies to curb supplies.

The committee's recommendation that the supply cut deal be extended was not a surprise, after oil ministers from top exporter Saudi Arabia and Kuwait gave a clear signal on Thursday that producers planned to prolong the accord.

Russian energy minister Alexander Novak said on Friday a decision on extending the pact had not yet been taken, but would be discussed with OPEC on 24 May. OPEC ministers plus their non-OPEC counterparts are scheduled to meet on 25 May.

The meeting also discussed OPEC's own compliance, which it put at 103 per cent, in line with figures published in OPEC's most recent monthly report.

The panel, which met at OPEC's Vienna headquarters, is the Joint Technical Committee (JTC) established in January to monitor adherence to supply cuts.

Top OPEC producer Saudi Arabia is also a member of the JTC in its capacity as 2017 OPEC president.