DUBAI / MOSCOW (Reuters) – OPEC and its insiders will decide on Thursday whether to freeze or pick up oil production slightly from April as a recent price rally has been scored with concern over how fragile economic recovery during COVID-19 pandemic.
The market has been expecting an OPEC + group of producers to reduce supply cuts by about 500,000 barrels per day (bpd) from April. Saudi Arabia’s de facto OPEC director is also expected to end the additional 1 million bpd voluntary product cut.
But three OPEC + sources said Wednesday that some key members of the Organization of the Petroleum Exporting Countries (OPEC) had suggested that results across the OPEC + group should be kept unchanged.
It was not immediately clear whether Saudi Arabia would end its voluntary cuts or extension, they said.
Russia has been pushing for production to avoid further price spirals and to support borrowing to extract oil from the United States, which is not part of OPEC +.
Graphic: OPEC + Procurement Opportunities (Basic Issue),
But in February Moscow failed to raise yields, despite OPEC + allowing them to do so, as bad winter weather hit yields at mature fields.
JP Morgan cited Russia’s representative on OPEC +’s technical committee, Denis Deryushkin, as saying that Russia saw some philosophy in building a product as the oil market was in deficit of 500,000 bpd.
A source familiar with Russian thinking said Moscow wanted to increase its output by 0.125 million bpd from April.
Graphic: OPEC + compliance with oil production cuts,
Graphic: OECD Commercial Oil Products,
Reporting with Rania El Gamal in Dubai, Ahmad Ghaddar and Alex Lawler in London, Olesya Astakhova and Vladimir Soldatkin in Moscow; Written by Dmitry Zhdannikov; Edited by David Goodman