The Russian and US presidents today discussed the oil markets and the ongoing Opec+ agreement, ahead of a series of meetings that may happen this week.The Kremlin said that Vladimir Putin and Donald Trump “noted that this multilateral agreement, reached with the active support of the presidents of Russia and the US, leads to a gradual recovery of demand for oil and to stabilisation of prices.” It gave no further details other than that the two leaders’ conversation was “constructive, businesslike and informative”.
The US has previously said that it played a role in facilitating Saudi Arabia’s decision to deepen its production cut commitment under the Opec+ deal.Opec and the wider Opec+ group are scheduled to meet in videoconferences next week to discuss the evolution of the agreement, although Algeria, which holds the Opec presidency, has pitched moving this forward to 4 June. A decision on this may be made today.
Either way, the June videoconferences will be the first held by Opec+ since members struck a two-year output restraint agreement. The first phase of the deal, which took effect on 1 May, calls for the removal of 9.7mn b/d of crude from the market in May and June, and then 7.7mn b/d in the second half of the year, largely from an October 2018 baseline.
Several Opec+ delegates have suggested that the group should consider extending the higher cut level beyond June, given depressed global demand and high OECD inventory levels in the wake of the Covid-19 pandemic.
Previously, Mideast Gulf producers have delayed issuing their official formula prices and term allocations until after the Opec+ meetings have taken place. A change to the date of the June conference could help speed along Mideast Gulf allocations. Saudi Aramco, the state-controlled marketer of Opec de facto leader Saudi Arabia, is likely to release its official July prices around 5 June.