Citigroup sees a 60 to 70 percent chance OPEC, Russia could make deeper production cuts

(L-R): OPEC Secretary General Mohammad Barkindo, Mexican Deputy Secretary of Energy for Hydrocarbons Aldo Flores-Quiroga , Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih and Russian Energy Minister Alexander Novak.

Patti Domm | CNBC

(L-R): OPEC Secretary General Mohammad Barkindo, Mexican Deputy Secretary of Energy for Hydrocarbons Aldo Flores-Quiroga , Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih and Russian Energy Minister Alexander Novak.

He said it is possible they could cut another 300,000 to 500,000 barrels per day, and Saudi Arabia would have to contribute the lion’s share. OPEC, Russia and other oil producers first agreed to a six-month production cut in December.

Earlier Monday, Saudi Arabia energy minister Khalid al-Falih and Russia energy minister Alexander Novak said they would like to extend the current agreement by 9 months and that they would discuss it with other producers. OPEC is expected to approve an extension of the deal at its May 25 meeting.

“I wouldn’t be surprised if they’re working on a deeper cut,” said Morse. He said the fact that they are discussing extending the deal does, in essence, make the cut bigger than if it had been extended by only six months, as expected.

He said producers would like to get oil to $60 per barrel. There has been market speculation that the cuts could be made deeper, though OPEC officials have not confirmed it.

Source link

NO COMMENTS