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OPEC+ crude output cuts likely to be sustained at least at 0.9 mb/d

Oil&Gas Materials 7 June 2019 10:31 (UTC +04:00)

Baku, Azerbaijan, June 7

By Leman Zeynalova – Trend:

OPEC+ crude oil output cuts are likely to be sustained at least at 0.9 million barrels per day (mb/d), Spencer Welch, director of the oil markets and downstream team in the London-based IHS Markit told Trend.

The expert was sharing his expectations from the upcoming OPEC meeting to be held in Vienna.

“It’s going to be a really interesting OPEC meeting (as normal), with Iran watching closely if others want to increase production to take their market share, and Russia/Saudi potentially disagreeing on whether to sustain the cuts and by how much,” he said.

However, Welch said with crude price down below $65 per barrel, and Saudi needing $70 per barrel or more to balance their budget, he thinks it is most likely that cuts will be sustained, at least at 0.9 million barrels per day and quite possibly at the full 1.2 million barrels per day.

Saudi Arabia and Russia are discussing two main scenarios for a meeting of OPEC. Russia wants to ease the cuts of 1.2 million barrels per day (bpd) being carried out by the so-called OPEC+ alliance. Another option is to ease the agreed cuts from 1.2 million bpd to 0.9 million bpd, which would mean raising output by some 0.3 million bpd.

The 176th Meeting of the OPEC Conference will be held on 25 June 2019, while the 6th OPEC and non-OPEC Ministerial Meeting is expected on 26 June 2019 both in Vienna.

On December 7, 2018, an agreement was reached at the fifth ministerial meeting of the non-OPEC member and non-OPEC countries in Vienna to cut daily oil production by 1.2 million barrels.

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Follow the author on Twitter: @Lyaman_Zeyn

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