Sunday, January 26,
2020 / 11:53 AM / By Tsvetana Paraskova for
Oilprice.com / Header Image Credit: Oilprice
OPEC
members are discussing a potential extension of the oil production cuts through
the end of 2020, an OPEC source told Russian news agency TASS on Friday.
Talks
are at early stages, but there is an understanding that after March, the cuts
should be extended until the end of the year, the OPEC source told TASS on the
sidelines of the World Economic Forum in Davos.
"Certainly,
we can review any agreement at the meeting in June," TASS's source at OPEC
said.
According
to the source, it is "unlikely" that the cartel decides to relax the quotas in
March, because the market is still very bearish in its demand growth outlook.
At
the OPEC+ meeting in December, OPEC and its Russia-led partners decided to
deepen the oil production cuts by 500,000 bpd in the first quarter of 2020,
when demand is expected at its weakest for 2020. This brings total production
reductions at 1.7 million bpd-that is if rogue members fall in line with their
quotas.
Considering
the pledge from OPEC's largest producer and de facto leader Saudi Arabia that
it would continue to significantly overcomply with its share of the cuts, the
total OPEC+ cuts could be as high as 2.1 million bpd, OPEC said.
The
agreement in its current form expires at the end of March and OPEC and its
allies are set to meet early that month to decide how to proceed with the deal.
All
options are on the table for the next summit of the OPEC+ coalition, including
further cuts in oil production, Saudi Arabia's Energy Minister, Prince
Abdulaziz bin Salman, said on Thursday.
OPEC
will have to address the oversupply in the market in the first half this year,
and the cartel is likely to extend the production cuts through the end of 2020,
Sushant Gupta, Research Director - Asia Pacific, Refining and oils market at Wood
Mackenzie, told CNBC earlier this week.
Related
News
Related News - Reviews & Outlooks
3.
NCM2020 (4) -
Africa's Projected 4% Growth Is Insufficient To Make A Dent
4. FBNQuest 2020
Research Outlook: Global Headwinds Moderating, Domestic Calm
5. United Capital
To Host 2020 Outlook Breakfast Session
6. NSR H1 2020 (11)
- Fixed Income - Liquidity Surfeit to Keep Yields Subdued
7. NCM2020 (2) -
Significant Downtrend Recorded in Global Growth; Major Economies Negatively
Affected
8. FY 2020 Outlook:
Treading Uncharted Waters
9. Increasing
External Risks and Weak Public Finances Keep 2020 Outlook on SSA Sovereigns
Negative
10. NSR H1 2020 (10)
- Monetary Policy - CBN Caressing Both FPIs and Economic Growth
11. NOVA Economic Outlook
H1 2020 - Nigerian Economy To Grow By 2.4% YoY Over 2020
12. NSR H1 2020 (9)
- GDP - Economic Growth Should Remain Anemic, Flatlined at 2.2%
13. NSR H1 2020 (8)
- Inflation Set for a Double Whammy in 2020!
14. Year Ahead 2020
- Re-risking The Financial System
15. NSR H1 2020 (7)
- Currency - How Long Can The CBN Keep Up?
16. NSR H1 2020 (6)
- Balance of Payment - Edge of the Cliff
17. NSR H1 2020 (5)
- EM Portfolio Flows - Happy Days Ahead for EM Foreign Portfolio Flows
18. Fitch Revises
IHS's Outlook to Negative; Affirms at 'B plus'