* Opec+ panel recommends additional cuts of 500,000 bpd
* Oil glut looms due to booming output in US, Brazil, Norway; Russia says new cuts will last until Q1
Opec and allies led by Russia on Thursday agreed one of the deepest output cuts this decade to prevent oversupply in a deal that will apply for the first three months of 2020.
The Organisation of the Petroleum Exporting Countries (Opec) is meeting to discuss policy in Vienna.
Today Opec will meet with Russia and other producers, a group known as Opec+. Existing supply curbs of 1.2mn barrels per day, aimed at supporting oil prices and preventing excess supply, are set to expire in March.
Russian Energy Minister Alexander Novak said a panel of energy ministers including Saudi Arabia and Russia had recommended Opec+ deepen the cuts by 500,000 bpd.
A cut of 1.7mn bpd would amount to 1.7% of global supply.
"We really do see some risks of oversupply in the first quarter due to lower seasonal demand for refined products and for crude oil," Novak said.
He said cuts would last through the first quarter of 2020, a shorter timeframe than suggested by some Opec ministers, who have called for extending cuts until June or December 2020.
Opec+ has agreed voluntary supply cuts since 2017 to counter booming output from the shale fields of the United States, which has become the world's biggest producer.
Washington has forced an even steeper reduction in supply through sanctions on Opec members Iran and Venezuela aimed at choking both countries' oil export revenue.
Producers face another year of rising output from the United States along with other non-Opec producers Brazil and Norway.
"With a weaker US dollar, improving economic data and Opec aggressively managing supply, this should ensure a $60-$65 Brent oil price in the seasonally weak period of next year," said Gary Ross, founder of Black Gold Investors.
Opec's actions have supported oil prices at around $50-$75 per barrel over the past year.
Brent crude futures on Thursday extended this week's gains to trade above $63 per barrel.
Non-Opec member Russia had previously opposed extending or deepening cuts as its companies are arguing that reducing output during winter months amid low temperatures damages the fields.
Opec's actions in the past have angered US President Donald Trump, but Trump has said little about Opec in recent months.
That might change if oil and gasoline prices rise ahead of the US presidential election set for November 2020.
Opec sources have said Iraq and Nigeria were under pressure to improve their compliance with quotas, which could provide an additional reduction of up to 400,000 bpd.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MoCI organises workshop on reforms for facilitating business in Qatar
Al Khaliji stays ‘well positioned’ to ‘achieve excellence’: Sheikh Hamad
LNG cargoes cancelled as virus compounds export glut in US
Millions of Chinese firms face collapse if banks don’t act fast
Africa a big victim of coronavirus with $4bn in lost export revenue
Chinese restaurants starved for cash as virus hits industry
HP adopts shareholder rights plan to slow Xerox takeover bid
With gold surging, miners face payouts vs production dilemma