The Organization of the Petroleum Exporting Countries (OPEC) and its allies may prolong the production cut agreement as the market is still oversupplied, Pipeline Oil and Gas Magazine reported.
“In analyzing current oil market conditions and macroeconomic developments, the committee also recognized that critical uncertainties remain, including ongoing trade negotiations, monetary policy developments, and geopolitical challenges,” OPEC said in a statement after a committee meeting on May 19 in Jeddah, Saudi Arabia.
Commitment to the output deal registered 168% in April, while average conformity since January reached 120%, according to OPEC.
“This second half [of the year], our preference is to maintain production management to keep inventories on their way declining gradually, [and] softly but certainly declining towards normal levels,” Saudi Energy Minister Khalid al-Falih said.
OPEC and its allies will continue to monitor and analyze market developments and inventory projections to make a recommendation for the June summit in Vienna, which will decide on whether production cuts should be extended for H2 2019.