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Oil Prices Hold Gains As OPEC+ Near Production Cut Extension Deal

Courtesy of ZeroHedge. View original post here.

Update: Russian Energy Minister Novak has stated that the extension of six to nine months is a consolidated agreement and other countries are in favour of such an extension.

Novak’s comments, and Russia agreeing to extend the OPEC+ deal, have removed a uncertainty from the discussion surrounding the deals future; as until these comments it was not known precisely what Russia’s position around an extension was and whether or not they would support one.

It is becoming increasingly clear that Russia is taking a larger and larger role in controlling OPEC (behind the scenes) as Bloomberg's Javier Blas notes:

*  *  *

Oil prices are up notably, after Friday's plunge, as confidence builds that the OPEC+ alliance is poised to extend production cuts into 2020.

At the start of two days of meetings in Vienna, Bloomberg reports, that the world’s leading oil exporters are likely to extend production cuts as they fret about a weakening outlook for global demand growth and the relentless rise in output from America’s shale fields.

Of course, the OPEC+ meeting is actually moot since Russia and the Saudis already agreed the cuts would be extended at the G-20 meeting over the weekend.

"The market is going to like the nine months extension," said Mohammad Darwazah, oil analyst at consultant Medley Global Advisers, who’s in Vienna monitoring the oil talks.

"Everyone now is realizing that in 2020 supply growth will exceed demand growth. And the Saudis and the Russians are trying to get ahead of that situation."

And it is, for now…

However, as Bloomberg notes, it is not a completely done-deal as despite the broad consensus for a six-to-nine month extension, the meeting could prove contentious as Iran appears determined to make an issue of the growing dominance of Saudi Arabia and non-member Russia in the policy decision making of the cartel.


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