OPEC Could Extend Oil Cuts Until End Of 2020- TASS

The Organisation of Petroleum Exporting Countries (OPEC) is eyeing extensions of its oil production cuts until the end of 2020, but talks are still in early stages, Russian news agency TASS reported, citing an OPEC source.

The source said that OPEC is set to meet in March, but might meet in June as well to decide its policy.

OPEC’s deeper production cuts for 2020 are in effect; the organisation and its allies, collectively OPEC, agreed to tighten output by 1.2m bpd in 2019, and in December decided to deepen cuts by an additional 500,000bpd.

Saudi Arabia, which has shouldered additional cuts through 2019 to compensate for other members that did not fully comply with their quotas, will continue to over comply with cuts, taking approximately 400,000 more barrels per day off the market.

The group has exceeded its cuts; Reuters found that compliance rose to 158% in December, up from 153% in November.

Meanwhile, the US Energy Information Administration (EIA) revealed in its January short-term Energy outlook that it sees Brent crude oil spot prices averaging $65 per barrel in 2020, rising to $68 per barrel in 2021.

It also estimated that the US produced an average of 12.2mn barrels per day (mbpd) of crude oil in 2019, up 1.3mbpd from the previous year.

It forecasts US production at 13.3mbpd in 2020, with an increase to 13.7mbpd in the following year.

In 2019, US net crude and petroleum product imports dropped sharply to 500,000bpd, compared to 2.3mbpd in 2018.

While it will not stop imports, the US is expected to be a net exporter of total crude oil and petroleum products by a margin of 0.8mbpd in 2020, and 1.4mbpd in 2021.

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