Opec+ members could extend oil cuts

Opec and its allies have yet to begin formal talks on extending 2.2-million barrels per day of voluntary oil output cuts beyond June, but three sources from Opec+ producers who have reduced production said they could extend if demand fails to pick up.

Opec+, which includes Russia and other non-Opec producers, next meets on June 1 in Vienna to set output policy. Opec did not respond to a request for comment.

The Opec+ group is cutting output by 5.86-million barrels per day (bpd), equal to about 5.7% of global demand. The cuts include 3.66-million bpd by Opec+ members valid through the end of 2024, and 2.2-million bpd of voluntary cuts by some members expiring at the end of June.

Oil prices have found support this year from the conflict in the Middle East, though concern about economic growth and high interest rates has weighed. Brent crude hit a seven-week low on Wednesday and settled at $83.44 a barrel.

The three sources from countries which have made voluntary supply cuts said an extension was likely.

The cuts could be extended until year-end, said one source, while another said it would take a surprise jump in demand for Opec+ to make any changes.

Two other Opec+ sources said formal talks had yet to take place, and one of those said Opec+ was not yet leaning one way or the other on extending cuts.

The countries which have made voluntary cuts that are deeper than those agreed with the wider group are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the UAE.