Opec, allies affirm commitment to oil cuts, defer decision to extend

Bloomberg

Saudi Arabia led fellow members of the Opec+ coalition to reaffirm their commitment to output cuts, but conceded they should defer until June the decision on whether to extend the curbs.
A committee of the most influential members in the 24-nation alliance, which includes Russia, Iraq and the United Arab Emirates, agreed to go beyond their pledged supply curbs in the coming months. They also recommended cancelling a planned April meeting, saying it would be too soon to determine whether the cuts should continue into the second half.
The change in timing, which still needs to be agreed by the wider coalition, reflects what the committee described as “critical uncertainties” in the oil market, with US sanctions threatening to remove significant supplies from Iran and Venezuela. When Opec and its allies agreed their production cuts in December, Saudi Energy Minister Khalid Al-Falih was initially in favour of a decision to extend them into the second half of 2019 at the planned April meeting. Speaking before talks in Baku, Azerbaijan on Monday, he acknowledged that “April will be premature to make any decisions.”
The group’s cuts have helped engineer a 25 percent recovery in Brent crude this year. Prices were little changed near $67 a barrel on Monday, well below the levels that most of the producers need to cover government spending.
Market fundamentals have “significantly improved but more needs to be done,” Al-Falih said on Monday. “We’re seeing inventories building, and even if they stop building we still have a long way to go” to bring the
market back into balance.