OPEC and non-OPEC allies are planning to hold on to their pact on cutting oil supplies until the end of 2018 but are willing to make gradual adjustments to offset any supply shortage, Reuters reported, citing a Gulf source.
The oil producers participating in the output reduction deal are satisfied with the result of their agreement, which was due to end by year-end, the source told the news agency.
The deal could be extended to achieve its objectives of keeping a balanced oil market, the source said, adding that, when needed, any rise in output would be “in a gradual and deliberate fashion.”
The OPEC with Russia and several other producers agreed to cut output by about 1.8 million barrels per day starting January 2017, which eventually reduced inventories and supported prices.
"The oil market is moving towards balancing and fundamentals are better than last year, but the group is not ready yet to fully lift controls,” the source said.
“Saudi Arabia, OPEC and non-OPEC... are continuing their cooperation this year and beyond, it is not something temporary, it is going to be a long-term cooperation for the sake of a stable oil market,” the source added.
Last week, the energy ministers of Saudi Arabia and Russia said they were prepared to ease output cuts to calm consumer worries about supply adequacy.
Meanwhile, Brent crude was trading down 0.37 percent at $77.21 per barrel (bbl), while US West Texas Intermediate (WTI) crude futures fell 0.19 percent to $68.08/bbl on Thursday morning.
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