OPEC, Russia nearing accord on long term oil supply coordination

OPEC on Thursday cut its forecast for growth in global oil demand due to trade disputes and pointed to the risk of a further reduction. (Reuters)

• OPEC+ due to meet on June 25-26 or in early July to decide whether to extend the output cut
• OPEC on Thursday cut its forecast for growth in global oil demand due to trade disputes

MOSCOW: OPEC and other producers including Russia are in final talks for an agreement, that may be signed in early July, to cooperate on oil supplies on a long-term basis, Japan’s Nikkei reported, citing Russian energy minister Alexander Novak.
Novak also told the Nikkei that discussions with OPEC on moving the date of the meeting to early July from the originally-planned dates of June 25-26 were nearly finalized.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have since January 1 implemented a deal to cut output by 1.2 million barrels per day to support prices.
The alliance, known as “OPEC+,” was due to meet on June 25-26 or in early July to decide whether to extend the pact.
A proposal to create a formal body was abandoned earlier this year after the US Congress started moves to legislate against cartels in the oil industry.
But the Nikkei said the group was trying to make OPEC+ a permanent framework under an accord to be signed at the next meeting.
The report did not say whether Russia is willing to agree to extend the agreement on output reduction.
OPEC on Thursday cut its forecast for growth in global oil demand due to trade disputes and pointed to the risk of a further reduction, building a case for supply restraint through the rest of 2019.
Crude oil prices jumped 4 percent on Thursday after suspected attacks on two oil tankers in the Gulf of Oman sparked tensions between the United States and Iran and raised concerns over the safety of oil shipments through one of the world’s busiest sea lanes.
Prior to this latest scare, some OPEC members had been worried about the recent steep slide in prices, which have tumbled to $62 a barrel from April’s 2019 peak above $75, due to concern over the US-China trade dispute and a global economic slowdown.
OPEC said, in a monthly report published on Thursday, that world oil demand would rise by 1.14 million barrels per day (bpd) this year, 70,000 bpd less than previously expected.