Oil producers agree they should cooperate on output after 2018

Venezuela assumes rotating presidency of OPEC

FE Team | Published: January 21, 2018 21:33:04

MUSCAT, Jan 21 (Reuters): OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires, Saudi Arabian energy minister Khalid al-Falih said on Sunday.
If oil inventories increase in 2018 as some in the market expect, producers may have to consider rolling the supply cut agreement into 2019, but the exact mechanism for cooperation next year has not yet been decided, Falih said.
He was speaking at a news conference after a meeting of the joint ministerial committee which oversees implementation of the cuts. The committee includes Russia and Kuwait, among other countries.
Earlier the Saudi Arabia's Energy Minister called for extending cooperation between OPEC and non-OPEC oil producers beyond 2018 after a deal to shore up crude prices.
"We should not limit our efforts to 2018. We need to be talking about a longer framework for our cooperation," Faleh said before a meeting between OPEC and non-OPEC countries in Muscat.
This is the first time OPEC kingpin Saudi Arabia explicitly calls for extending a 2016 deal between oil producers to cut back production to combat a global oil glut.
OPEC and non-OPEC countries signed a landmark agreement in November 2016 to cut output by 1.8 million barrels per day to fight huge oversupply and lift sagging crude prices.
That deal was initially for six months, but the 14-member cartel and 10 independent producers have since extended it until the end of this year.
"I am talking about extending the framework that we started-which is the declaration of cooperation-beyond 2018," Faleh told reporters.
But Faleh said the new framework for cooperation might differ from the current agreement and its production quotas.
Xinhua from Caracas adds: Venezuela has assumed the rotating presidency of the Organisation of Petroleum Exporting Countries (OPEC), Venezuelan Oil Minister Manuel Quevedo said on Saturday.
"Venezuela assumes the rotating presidency of OPEC in 2018," Quevedo, who is also president of the state oil company PDVSA, posted to Twitter.
Quevedo made the announcement from Oman, where OPEC is holding a ministerial meeting to monitor oil-producing countries' compliance with an agreement to cap output to shore up prices.
According to the PDVSA, the meeting "aims to unite efforts to speed up the stabilization of the global oil market," which saw crude prices plummet in 2014. They have since climbed back up to about 63 US dollars a barrel.
The monitoring committee is comprised of OPEC members Algeria, Kuwait and Venezuela and non-OPEC oil producers Russia and Oman.