Oil producers to extend output curbs at OPEC meeting

The Organization of the Petroleum Exporting Countries will meet in Vienna on Thursday to consider whether to extend curbs agreed in December a year ago between OPEC and 11 non-member countries, including Russian Federation.

"A 9-month extension would normalize OECD inventories by early 2018, in our view, but we see risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanding capacity and shale grows at an unbridled rate", the USA bank added.

"We believe that the continuation with the same level of cuts plus potentially adding one or two small producers who wish to join will be more than adequate to bring the five-year balances to where they need to be by the end of the first quarter of 2018", Khalid Al Falih, the Saudi oil minister, said in Riyadhn yesterday.

He said a new agreement would be similar to the previous pact, with minor changes.

Saudi Arabia and Russian Federation, the biggest of the 24 producers in the accord - and which don't get on in other areas either - agreed last week that it should be extended until March.

Saudi Arabia's Gulf ally Kuwait said on Tuesday not every OPEC member was on board for an extension to March 2018, from the initial cut-off of June this year, but most delegates in Vienna said they expected a fairly painless meeting on Thursday.

A release of US strategic reserves could jolt an already imbalanced oil market and undermine attempts by The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russian Federation, to end a persistent glut.

When the nations last discussed the deal, Libyan output remained seriously curtailed due to several years of post-Gaddafi infighting, earning the North African country an exemption from the quotas that bound the rest of the block's members.

The White House budget plan, released just after Trump left Saudi Arabia, the defacto leader of the Organization of the Petroleum Exporting Countries (OPEC), is seen as undermining OPEC-led plans to tighten global markets by cutting production, and points toward a future of ongoing ample supplies. He said any decision would not be finalized until OPEC meets.

"During my last visit to Vienna for the 6th Opec International Seminar in 2015, I had raised the issue of "Asian Dividend not Asian Premium". With Nigeria and Libya onboard, the cuts could be raised to 1.8 million bpd, the minister added.

The moves comes just after Goldman Sachs warned of "risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanding capacity and shale grows at an unbridled rate".

NEW YORK, May 22 (Reuters) - Oil prices rose on Monday as growing confidence that top exporters would agree to extend supply curbs this week and speculation that the cuts could be deepened further pushed prices to their highest levels in more than a month. Al-Falih said al-Abadi gave the "green light" for Iraq to approve the nine-month extension proposal in Thursday's meeting.

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