Saudi Arabia and Russia are to discuss raising OPEC and non-OPEC oil output by about 1 million barrels per day (bpd), easing 17 months of strict supply curbs, sources familiar with the matter said.
An increase of about 1 million bpd would bring compliance with global supply curbs down to 100 percent from about 152 percent, the sources said.
The initial talks are being led by the Saudi Arabian and Russian energy ministers at St Petersburg this week, along with their counterpart from the United Arab Emirates, who holds the OPEC presidency, the sources said.
OPEC and non-OPEC ministers meet next in Vienna from June 22 to 23, and the final decision is to be taken there.
Discussions are ongoing and are aimed at relaxing record high compliance with the production cuts, which reached 152 percent in April, to just 100 percent, in a bid to cool the market after oil prices rose to US$80 a barrel on supply shortage concerns, the sources said.
The final production number that needs to be added is not yet set, as dividing up the extra barrels can be tricky, the sources said.
“The talks now are to bring compliance down to 100 percent level, more for OPEC rather than for non-OPEC,” one source said.
OPEC might decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply, and after Washington raised concerns that the oil rally was going too far, sources said.
Oil is trading near a three-and-a-half-year high as concern about the potential supply disruptions has boosted prices further after crude rebounded from the worst crash in a generation on the back of output cuts made by OPEC and its allies.
While the rally has sparked concern that demand might falter, OPEC’s strategy is complicated by surging shale supplies in the US, where drillers are pumping at a record pace.
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