Saudi Arabia’s oil minister has said it’s “inevitable” that OPEC and its allies will agree to boost oil output gradually, giving the most definitive signal yet that the cartel will alleviate high prices for consumers.
“I think we’ll come to an agreement that satisfies most importantly the market,” Khalid Al-Falih told reporters in Moscow on Thursday, when asked about the outcome of the meeting between the Organization of Petroleum Exporting Countries and its allies in Vienna next week. “I think it will be a reasonable and moderate agreement” but nothing “outlandish,” he said.
Russian Energy Minister Alexander Novak also after the talks that both nations "in principle" supported the gradual exit from the deal.
"We in general support this ... but specifics we will discuss with the ministers in a week," Novak said, adding that one option would involve gradually hiking output by 1.5 million bpd, possibly starting from July 1.
Saudi Arabia's Falih did not offer specific guidance on what any deal in Vienna could look like. But he said: "We will see where we go, but I think we'll come to an agreement that satisfies, most importantly, the market."
Many analysts expect a rise in output from the meeting.
"The shape of the deal is far from certain yet given the Russians seem to want a more aggressive wind back than most of OPEC," Greg McKenna, chief market strategist at futures brokerage AxiTrader, said in a note.
"My guess is the increase will be something less than the 1 million bpd (barrels per day) that the U.S. is supposed to have asked the Saudis for."
Saudi Crown Prince Mohammed bin Salman told Russian President Vladimir Putin on Thursday that Saudi Arabia wants to continue cooperation with Russia on global oil markets.
Meanwhile, oil got some support after attacks shut major Libyan oil ports on Thursday, slashing production by 240,000 barrels per day.
South Korea's Iranian crude oil imports fell in May to their lowest since January, 2016 as South Korean buyers sought to reduce purchases of Iranian oil amid new U.S. sanctions on Iran.
Following the talks, Brent oil prices extended declines on Friday Brent crude down 17 cents, or 0.2 percent, at $75.77 a barrel after settling down 80 cents the session before.
U.S. West Texas Intermediate crude was up 2 cents at $66.91 a barrel, having settled up 25 cents. It touched a two-week high of $67.16 on Thursday.
Brent and WTI hit 3-1/2-year highs in May, but have since drifted lower as U.S. crude production rises and as the Organization of the Petroleum Exporting Countries, Russia and other allies look poised to increase output in their meeting in the Austrian capital on June 22-23.