Published On: Fri, Sep 22nd, 2017

OPEC panel to discuss export monitoring, oil pact extension

OPEC and other oil producers meeting on Friday will consider extending their pact to cut oil output beyond March and will discuss monitoring exports to assess compliance with the deal.

The Organization of the Petroleum Exporting Countries, Russia and several other non-OPEC producers aim to clear a global oil supply glut by curbing output by about 1.8 million barrels per day (bpd). The pact runs to the end of March 2018.

Ministers on a panel monitoring the deal, which comprises Kuwait, Venezuela and Algeria, plus non-OPEC Russia and Oman, are meeting in Vienna. The meeting, scheduled to start at 0900 GMT, was likely to be brief, two OPEC delegates said.

Oil prices have gained more than 15 percent in the past three months to trade above $56 a barrel, suggesting the deal is making progress in getting rid of excess supply.

But global inventories have only slowly shown signs of falling and prices are still half the level of mid-2014.

Ministers and other officials said Friday’s gathering would consider extending supply curbs beyond March, although the meeting of the Joint Ministerial Monitoring Committee will only recommend action to the rest of the group, not take a final decision.

Russian Energy Minister Alexander Novak said ministers were also considering tracking oil exports by those involved in the pact.

“We are discussing (oil exports monitoring) but there are difficulties from the point of view of data accuracy,” Novak said. “On the whole we are not against it as an additional factor. The main factor is production.”

OPEC officials have said exports have become a key metric tracked by the market because they have a more direct impact on the international supply than production.

The deal, which began on Jan. 1, sets production limits for participating OPEC and non-OPEC states but puts no restrictions on export levels, so some producers have been able to keep exports relatively high by dipping into their reserves.

Friday’s meeting, chaired by Kuwait, could make a policy recommendation before the wider group meets in November.

Nigeria’s oil minister and the head of Libya’s state oil company, whose countries are exempt from the supply cuts, are attending.