OPEC Oil-Deal Extension Backed by Most Nations, Algeria Saysby and
Most participants favor 9-month extension to accord: Boutarfa
More countries have asked to join a renewed oil-cuts agreement
Algeria, which was instrumental in crafting OPEC’s historic output deal last year, said a nine-month extension to the accord would be backed by most participating nations and spur a higher rate of compliance.
“Most of the countries support the proposition of Russia and Saudi Arabia to extend,” Algerian Energy Minister Noureddine Boutarfa said Thursday in Moscow after talks with his Russian counterpart, Alexander Novak. Algeria also favors that course of action and is “optimistic for an agreement,” he said.
Signatories to a deal struck between the Organization of Petroleum Exporting Countries and its allies, including Russia, late last year will meet May 25 in Vienna to discuss prolonging the supply curbs. Saudi Arabia and Russia said Monday they favor extending the agreement through the first quarter of 2018 to reduce bloated global inventories to the five-year average.
Compliance with promised cuts is “better each month” and will improve with a renewed deal, Boutarfa said later Thursday in an interview.
Cuts by OPEC members are already deeper than their pledged reductions, while overall compliance -- including non-OPEC nations -- is at more than 95 percent, according to the minister. The International Energy Agency put non-OPEC compliance at 66 percent in April.
Algeria agreed to cut 50,000 barrels a day and has actually reduced output by 55,000 a day, according to Boutarfa, who sees oilfield maintenance in May and June curbing its production by a further 15 percent. The country is also proposing to set up a high-level committee of experts to advise OPEC and non-OPEC ministers on extending or curtailing the curbs, he said.
Led by the world’s biggest producers, Saudi Arabia and Russia, the 24 participating nations look set to extend their deal when they meet in Austria. Several more countries are also seeking to join the accord, Boutarfa said, without identifying them.
Boutarfa’s shuttle diplomacy between Russia, Iran and OPEC’s headquarters in Vienna late last year was key to securing the landmark accord, which saw countries pumping more than half the world’s oil agreeing to cut supply. Doing a deal was important for Algeria, which burned through cash during the oil-market rout to plug a widening budget deficit.
The country needs an oil price of $64.70 a barrel to balance its budget, according to the International Monetary Fund. Benchmark Brent crude traded around $52 on Thursday.