OPEC hasn’t even started implementing its new six-month agreement to cut output, and already members responsible for most of the reductions have pledged to extend or even deepen it.
Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group, along with Russia and other oil producers, will extend the agreement for another six months.
The U.A.E.’s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory buildup in the first half, hinted additional curbs could be discussed.
“The planned cuts have been carefully studied, but if it doesn’t work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past,” Suhail Al Mazrouei, who is also OPEC president, said in Kuwait.
“If we are required to extend for another six months, we will, if it requires more, we always discuss and come up with the right balance.”
Last week, oil capped its biggest weekly decline since 2016 on concerns that weakening economic growth and surging U.S. supply will lead to a surplus next year, overwhelming OPEC’s efforts to stabilize the market.
The slide continued even after the Organization of Petroleum Exporting Countries and its partners surprised traders with the size of the supply reduction announced on Dec. 7.