OPEC to scrap April meeting but keep oil cuts in place

Saudi energy minister says April would be too early for any decision on output policy

Reuters March 18, 2019
Saudi energy minister says April would be too early for any decision on output policy. PHOTO: REUTERS

BAKU: The Organisation of the Petroleum Exporting Countries (OPEC) is set to scrap its planned meeting in April and decide instead whether to extend oil output cuts in June, when the market will be able to assess the full impact of US sanctions on Iran and the crisis in Venezuela.

A ministerial panel of OPEC and its allies recommended on Monday that they cancel the extraordinary meeting scheduled for April 17-18, which means the next regular talks would be held on June 25-26.

The energy minister of OPEC's de facto leader, Saudi Arabia, said over the weekend that the market was looking oversupplied until the end of the year but that April would be too early for any decision on output policy.

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"The consensus we heard ... is that April will be premature to make any production decision for the second half," the Saudi Minister, Khalid al-Falih, said on Monday. "As long as the levels of inventories are rising and we are far from normal levels, we will stay the course, guiding the market towards balance," he added.

The United States has been increasing its own oil exports in recent months while imposing sanctions on OPEC members Venezuela and Iran in an effort to reduce those two countries' shipments to global markets.

Washington's policies have introduced a new level of complication for the OPEC as it struggles to predict global supply and demand.

"We are not under pressure except by the market," Falih told reporters before the Joint Ministerial Monitoring Committee (JMMC) meeting in the Azeri capital, Baku, when asked whether he was under US pressure to raise output.

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US President Donald Trump has been a vocal critic of OPEC, blaming it for high oil prices.

Many OPEC members have said Trump's sanctions policies have elevated the market. OPEC and its allies agreed in December to cut output by 1.2 million barrels per day - 1.2% of global demand - during the first half of this year in an effort to boost prices.