OPEC and its allies are unlikely to deepen supply cuts at their ministerial meeting on Sunday despite a fall in oil prices toward $70 per barrel, four sources from the alliance told Reuters.
As the economic outlook worsened, several members of OPEC+ in April pledged voluntary cuts starting from May and to continue to the end of the year.
The group of late has cut by more than its targets mainly because of capacity limitations in West African producers Nigeria and Angola.
The surprise announcement in April helped to drive benchmark Brent crude prices about $9 per barrel higher to above $87 over the days followed, but Brent has since lost those gains to trade below $73, under pressure from concerns about global economic growth and its impact on fuel demand.
Russian Deputy Prime Minister Alexander Novak subsequently said he did not expect any new steps from OPEC+ in Vienna, Russian media reported.
‘EVERYTHING CAN CHANGE’
Two other sources said it was too soon to be sure of the meeting’s outcome.
In March 2020, it abandoned production quotas altogether, launching a Saudi-Russian price war at the onset of the COVID-19 pandemic that sent oil prices 25% lower.
HSBC said in a note on Wednesday it did not expect OPEC+ to change its policy, but that the group may cut output later if an expected market deficit in the second half of the year does not materialise and prices remain below $80 per barrel.
OPEC has said it expects oil demand growth to reach 2.33 million bpd this year as non-OPEC supplies grow by 1.4 million bpd.
The bank also said OPEC+ may act later if prices remain below $80 in the second half of the year.
(Reporting by Ahmad Ghaddar, Alex Lawler and Rowena Edwards in London, Maha El Dahan in Dubai and Moscow bureau Editing by Simon Webb and Barbara Lewis)