OPEC+ set for talks on extending oil reduction deal on Saturday

The Organisation of the Petroleum Exporting Countries (OPEC) and allied oil producers are scheduled to conduct negotiations on Saturday, Russia’s Energy Ministry and sources in Vienna said.

The talks among the Vienna-based cartel and the Russia-led group of aligned countries, known as OPEC+, are expected to focus on whether to prolong an oil output reduction deal that was agreed two months ago to raise global oil prices that had plummeted as the coronavirus crisis hit demand.

The talks were to be completed within a single day, with OPEC ministers to begin at 1200 GMT and OPEC+ counterparts to enter the talks, two hours later, Russian state news agency TASS reported on Friday.

“It is going to be a long and difficult night,” an undisclosed source, involved in the talks, was quoted as saying.

The talks via video link had initially been scheduled to take place a few days later, on Tuesday and Wednesday.

Ministers of the OPEC+ countries agreed in a videoconference in April to cut output by 9.7 million barrels per day for May and June.

Since then, the benchmark price for European Brent oil has recovered from a level of around $20 per barrel to above $41.

An agreement to prolong the production curb seems likely, Commerzbank analyst, Eugen Weinberg, wrote in Frankfurt.

In addition, countries that had produced more than they should last month apparently agreed to uphold their commitments in the future, he said, pointing to Iraq, Nigeria, Angola and Kazakhstan.