OPEC+ is set to discuss a short extension of its current output cuts, according to a delegate, as the cartel considers bringing forward its next meeting a few days to June 4.

The cartel and its allies are considering extending the current cuts for one to three months, the delegate said yesterday. As the situation in the oil market is moving fast, the preference is to take short-term measures and not disrupt the rebalancing of the market, the delegate said.

The existing deal, struck in April as energy demand and prices collapsed because of the coronavirus pandemic, calls for output curbs to ease from July. But that’s up for discussion at the next meeting. Russia wants to start easing from July, people familiar with the situation said.

Oil prices have rallied as the output cuts coincided with a stronger-than-expected rebound in demand. But with lockdowns easing across the globe, fears that the pandemic could have a second wave make predictions of a recovery perilous. At about US$35 a barrel, prices are below what most producers need for government spending.

The date of the meeting, which will be held by video conference, is still to be confirmed today, after people familiar with the situation said OPEC members were close to an agreement to bring it forward to June 4.

An earlier date would give the oil cartel more flexibility to change its current production limits. OPEC members usually decide their plans for shipping oil to customers for July in the first week of June, so an earlier meeting would give them more time to react.

Algerian Energy Minister Mohamed Arkab, who holds the rotating presidency, proposed June 4, instead of June 9-10.

The 23-nation OPEC+ coalition led by Saudi Arabia and Russia is undertaking record oil-production cuts to prop up prices. At the meeting they will decide whether keep the existing agreement, or extend the current curbs.

The Organization of Petroleum Exporting Countries and its partners committed to lowering output by 9.7 million barrels a day, or about 10 percent of global supply, in May and June. In addition, Saudi Arabia, Kuwait and the United Arab Emirates made further voluntary cuts of about 1.2 million barrels a day for June, bringing the total OPEC+ curbs to almost 11 million barrels a day. (SD-Agencies)