OPEC+ sources have said Riyadh and Moscow agreed to extend existing record cuts throughout July.

File photo of OPEC HQ (Photo Credits: Reuters)

OPEC and its allies led by Russia meet on Saturday over plans to extend record oil production cuts and to push countries such as Iraq and Nigeria to comply better with existing curbs.

Nigeria’s oil minister said he expected a deal on an extension, which has the backing of Saudi Arabia and Russia, to be concluded in the video conference talks despite “reservations of one or two member countries,” which he did not name.

The alliance known as OPEC+ previously agreed to cut supply by a record 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Cuts were due to taper to 7.7 million bpd from July to December.

OPEC+ sources have said Riyadh and Moscow agreed to extend existing record cuts throughout July, while they said Riyadh wanted a further extension to August and possibly even December.

Global benchmark Brent crude LCOc1, which slumped below $20 a barrel in April, rose nearly 6 per cent on Friday to end at a three-month high above $42. That is still more than a third less than the price of oil at the end of 2019.

Saturday’s video conferences starts with talks between members of the Organization of the Petroleum Exporting Countries at 1200 GMT, followed by a gathering of the OPEC+ group at 1400 GMT, OPEC said on Friday.

“A formal announcement of a roll-over of the April 12 decision is expected to be made, the reservations of one or two member countries notwithstanding,” Nigeria’s minister of state for petroleum resources, Timipre Sylva, said in a statement.

OPEC sources said an extension of cuts was contingent on compliance as countries that produced above their quota in May and June must compensate by cutting more in future months.

Iraq, which had one of the worst compliance rates in May, according to a Reuters survey, agreed to additional cuts, OPEC sources said.

It was not clear how exactly Iraq would cut output and agree with oil majors working in the country to curtail production. Nigeria said it would also aim to reach full compliance.

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