The group headed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies want to maintain existing oil cuts beyond June when the OPEC+ is next due to meet to shore up prices and demand, which has been hit by the coronavirus pandemic, sources told Reuters.
Global oil demand has slumped by about 30 percent as the crisis has curtailed travel and economic activity, building up oil inventories globally. Brent crude prices fell 65.6 percent in the first quarter, before the OPEC+ grouping agreed its deepest oil cuts.
OPEC and its allies, led by Russia, who are known as OPEC+, agreed in April to cut output by 9.7 million barrels per day for May and June, a record reduction. While producers will slowly relax curbs after June, supply reductions will remain to April 2022.
OPEC+ meets next in early June to decide on its output policy. Under the deal, the exporting group is set to scale back the cuts to 7.7 million barrels per day from July until December.
“The ministers want to keep the same oil production cuts now which are about 10 million daily barrels, after June. They don’t want to reduce the size of the cuts. This is the basic scenario that’s being discussed now,” one OPEC+ source told Reuters.
Meanwhile, a source familiar with Russia’s thinking did not rule out a rollover of the existing oil cuts beyond June, but added that “it will depend on a market situation.”