VIENNA (AFP) – With oil prices nudging steadily higher, market expectations are for crude-pumping countries to prolong their deal to curb output at a meeting at OPEC headquarters in Vienna on Thursday.
Markets could be disappointed, however, with Russia reportedly not yet fully on board about signing up to extending the agreement, due to expire on March 31, until the end of 2018, experts say.
The deal by 24 producers reduced production by 1.8 million barrels per day, first struck a year ago, has already been given more time once.
It has borne fruit, helping reduce a global glut that sent oil prices to a less than $30 a barrel in early 2016, a level which helped consumers but blew a hole in producers’ finances.
Brent Crude is now nearing $65 per barrel, while fellow benchmark West Texas Intermediate has been heading for $60, with inventories approaching more normal levels.
The price has also been helped by growing optimism about the global economy and its effect on buoying oil demand, not least from China.
“We have accomplished what naysayers thought would be impossible,” Mohammad Sanusi Barkindo, OPEC secretary general, said on Monday.
“The current market conditions, the returning level of confidence and optimism in the industry are all evidence of the outcome of our joint efforts,” he said.
For one of OPEC’s founder members however, things are far from rosy. Venezuela, whose oil reserves are the world’s biggest, is a whisker away from an all-out debt default.
Just as the South American country needs foreign currency more than ever, oil output is forecast to fall for a seventh successive year in 2018 to the lowest level since 1989.
As a result, Venezuela is producing even less than it vowed to under the output agreement, further reducing the global glut and giving others extra breathing space.