Oil prices slide amid OPEC+ production cuts meeting uncertainty

Major global oil producers could still hold a ministerial video conference this week if Iraq and other non-complying OPEC+ members promise to deepen their production cuts, Reuters reported on Thursday, citing its sources.

A ministerial conference could be called at short notice this week if there was an agreement, the sources said, adding that a meeting on Friday could be arranged.  

OPEC and non-OPEC allies were originally scheduled to review their production cuts on June 9-10. However, Algeria, which currently holds the rotating OPEC presidency, proposed last month to bring the meeting forward.

On Wednesday TASS reported, citing sources, that the key OPEC+ producers, Russia and Saudi Arabia, have agreed to extend the maximum level of production within the alliance by at least one month.

Russian Energy Minister Alexander Novak said on Thursday that the global oil market could face a shortage of three to five million barrels per day in July, depending on the deal reached by OPEC+.

In April, the international oil producing alliance OPEC+ agreed to reduce supply by a combined 9.7 million barrels per day (bpd) during May and June. The move was designed to prop up crude prices as the Covid-19 pandemic led to an unprecedented collapse in energy demand. Production cuts began on May 1 and are set to run through to the end of June.

Crude prices climbed in recent weeks, recovering from a dramatic fall in April which saw Brent futures hover close to 20-year lows and US WTI tumble into negative territory for the first time in history.

The international benchmark was trading 0.8 percent lower as of 14:36 GMT on Thursday, at $39.44 a barrel. US crude tumbled 1.4 percent to $36.75.

According to analysts at S&P Global Platts, Brent crude prices “may find some pockets of support” in the range of $35 to $40 a barrel in June.

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