OPEC, ALLIES TO EXTEND OIL SUPPLY CUTS UNTIL JUNE 2020

has received more than $100 billion from the deal. And the deal has stabilised the Russian economy,” the head of Russia’s Direct Investment Fund, Kirill Dmitriev, told Reuters.

Dmitriev and Energy Minister Alexander Novak were the key architects of a deal with Saudi Arabia, which began in 2017.

Saudi Arabia and other Gulf producers in OPEC have been delivering more than their share of promised cuts to stabilise the market and prevent prices from falling.

In October, the kingdom raised its oil output to its OPEC

target, pumping 10.3 million bpd to replenish its inventories after attacks on its facilities last month, but kept the volumes of crude supplied to the market at 9.9 million bpd.

Last week, OPEC SecretaryGeneral, Mohammad Barkindo said US shale oil supply growth could slow next year while demand may have upside potential, appearing to downplay any need to cut output more deeply.

The current oil supply cuts run through to March 2020.

Reuters quoted OPEC source as saying that the cartel will

likely extend the supply cut until middle of 2020.

“So, far we have two main scenarios: either meet in December and extend the current cuts until June; or defer the decision until early next year, meet before March to see how the market looks and extend the cuts until the middle of the year,” said an OPEC source.

“It is more likely that we will extend the agreement in December to send a positive message to the market. The Saudis don’t want oil prices to fall, they want to put a floor under the prices because of the

(Aramco) IPO.”

An OPEC delegate also said the market conditions in the first quarter of 2020 remain unclear amid concerns of a slowdown in oil demand and weak output compliance by some producers such as Iraq and Nigeria, which is complicating the outlook.

“My feeling is that (an extension) to end-June to avoid meeting again early March, with the possibility of calling for an (earlier) meeting should market conditions require it ... is the likely scenario as of today.”

However, the two sources said formally announcing

deeper cuts looked unlikely for now although a message about better compliance with existing cuts could be sent to the market.

Saudi Arabia, OPEC’s de facto leader, wants to focus first on boosting adherence to the group’s production-reduction pact before committing to any more cuts, they said.

“The Saudis want to see how the rest of those who are not complying (with the cuts) do first. There are no numbers being circulated so far for deeper cuts or changing output quotas,” said the first OPEC source.