OPEC may increase oil production cuts to 1.6 million bpd, Iraq says

  • OPEC may increase oil production cuts to 1.6 million bpd, Iraq says

OPEC may increase oil production cuts to 1.6 million bpd, Iraq says

Brent futures rose 17 cents, or 0.3 per cent, to $61.09 a barrel by 0516 GMT, after having gained 0.7 per cent on Monday.

U.S. West Texas Intermediate crude CLc1 was up by 20 cents, or 0.4%, at $56.16 a barrel.

On Sunday, Iraq's oil minister, Thamer Ghadhban, told reporters in Baghdad that Opec and allies outside the cartel, known as Opec+, would consider cutting supply further by about 400,000 barrels a day to 1.6m.

Saudi Arabia is pushing a plan to give a positive surprise to the market prior to the initial public offering of state-owned Saudi Aramco, said the sources.

OPEC countries should administer deep cuts at their meeting in Vienna this week to avoid a plunge in oil prices, according to a research consultancy.

On Friday, prices plunged partly because the hopes of a bullish outcome from the meeting had faded after reports that Russia's energy minister signaled that Russian Federation is likely to request a change to the current agreement among OPEC+ to curb output in an effort to boost crude oil prices.

The partners will look at the outlook for the upcoming year, review reports and research related to the most important challenges faced in terms of oil surplus and increased U.S. shale production, the minister said.

USA crude inventories are expected to have declined last week, which may support prices, with analysts in a preliminary Reuters polls suggesting a contraction of 1.8 million barrels.

The investment bank said it expected Brent to trade around $60 a barrel in 2020, "absent new growth or geopolitical shocks".

Nonetheless, latest comment from Iraqi oil minister, Thamir Ghadhban, followed a shocking response from OPEC's one of the closest allies, Russia, energy minister of which was quoted saying earlier on Friday (November 29th) that the OPEC+ nation was seeking to prevent an extension of output curb amid growing grudges from its state-backed oil agencies.

Concerns about the inability of the United States and China, the world's two biggest oil users, to reach a preliminary deal to resolve their 17-month trade dispute also weighed on oil prices, along with discouraging USA economic data.

While it is anticipated that OPEC will probably continue to find the production cuts that are now going on as being useful, it's likely that the market will see a continuation of those production cuts. Their current deal, which agreed to cut supply by 1.2 million bpd from January, expires at the end of March.