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Saudi Arabia wants OPEC + to extend supply cuts through June: sources

For Rania El Gamal, Ahmad Ghaddar and Olesya Astakhova

DUBAI / LONDON / MOSCOW (Reuters) – Saudi Arabia is willing to support an extension of the crude supply cuts by OPEC and its allies until June and in favor of prolonging the voluntary additional cuts, in order to raise barrel prices in light of the new lockdowns, a source close to the matter said Monday.

After steady crude price gains this year, OPEC and its allies, known as OPEC +, hoped to further moderate production cuts.

But a new series of lockdowns from the jump in COVID-19 infections has pushed oil away from highs for the year, and four OPEC + sources told Reuters this could encourage the bloc to extend its supply cuts until May when it meets. Thursday.

The source informed of the matter said on Monday that Saudi Arabia is inclined to extend the cuts beyond May, until June.

“They don’t see that demand is strong enough and they want to prevent prices from falling,” the source said.

A source in the Saudi oil sector said on Tuesday that OPEC + had not yet made any decisions and that discussions on production quotas have not yet started.

Under the current restrictions, OPEC, led by Saudi Arabia, and other allied countries such as Russia, are cutting more than 7 million barrels per day (bpd) in supplies together, while Saudi Arabia applied a voluntary decrease of 1 million of bpd.

A source familiar with Russia’s policies said on Monday that Moscow would support a further extension of supply cuts although it will seek to be able to slightly increase its output.

(Written by Dmitry Zhdannikov. Edited in Spanish by Marion Giraldo)

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