OPEC-led oil curbs to be extended to end of 2018

(Reuters) OPEC and non-OPEC oil producers will agree at a meeting on Thursday to extend an output-cutting deal until the end of 2018, four sources familiar with the matter said.

The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day in an effort to boost oil prices, expires in March.

Nine-month extension

“They will agree on the nine months,” an OPEC delegate said, adding that the meeting, due to start around 0900 GMT, was expected to be smooth.

A second source said: “No surprises ... all are for nine months.”

Two other sources made similar remarks.

The 14-member Organisation of the Petroleum Exporting Countries and Russia have signalled that they may review any extension of the deal when they meet again in June if the market overheats.

OPEC headquarters in Vienna, Austria. OPEC oil ministers meet to discuss output curb extension: Wikimedia Commons

US production

With oil prices rallying above $60 per barrel, some are concerned that such an extension could prompt a spike in crude production in the United States, which is not participating in the deal.

Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.

Six ministers from OPEC and non-OPEC oil producers including Saudi Arabia and Russia met in Vienna on Wednesday and recommended extending the cuts to the end of 2018.

Market impact

Crude prices were higher in early trade in London. Brent crude, the global oil benchmark, was up 0.54% at $62.88 a barrel, while Nymex West Texas Intermediate, the US benchmark, gained 0.51% to $57.59 a barrel.