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INTERVIEW-Algeria says OPEC cut extension to ease oil glut by year-end
May 24, 2017 / 9:33 AM / 4 months ago

INTERVIEW-Algeria says OPEC cut extension to ease oil glut by year-end

VIENNA, May 24 (Reuters) - Algeria’s energy minister said on Wednesday he expects OPEC to extend oil output cuts by nine months, helping to ease a global glut of crude by the end of 2017 and possibly raising oil prices to more than $55 a barrel.

The Organization of the Petroleum Exporting Countries meets in Vienna on Thursday to consider whether to prolong a deal reached in December in which OPEC and 11 non-members agreed to cut output by about 1.8 million barrels per day in the first half of 2017.

Discussions have so far focused on extending cuts by six months to the end of 2017, by nine months until March 2018 or by six months with an option to extend by a further three months.

“There was no country that said ‘we oppose nine months’ ... You can’t say six and then an additional three. It would send the wrong message to the market,” Algerian Energy Minister Noureddine Boutarfa told Reuters.

He said the main reason to extend by nine months was traditionally weak demand at the start of each year.

“If you come and add 1.0-1.5 million barrels per day ... that will impact the market and prices. Therefore it is better that the deal stays in effect until the end of March.”

He said he saw inventories declining to their five-year average by the end of 2017.

“Before the end of the year, prices may go above $55 a barrel. For Algeria, the higher the price the better, but the budget focused on $50 a barrel in 2017, $55 a barrel in 2018. $55-$60 a barrel may be an acceptable price for Algeria.” (Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

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