OPEC recommends six-month extension of Oil output cuts

According to Thomson Reuters, a technical committee of OPEC and non-OPEC producers recommended that producers extend a global deal to cut Oil supplies for another six months from June.

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 January 1 to support the market.

Compliance numbers were also reviewed at the meeting in Vienna last week that was 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% in March. Oil prices still declined last 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 last Thursday that producers planned to prolong the accord.

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