By Ron Bousso
LONDON, Dec 3 (Reuters) - OPEC and other major oil producers are expected to agree to deepen output cuts to 1.5 million barrels per day (bpd) to the end of 2020 from 1.2 million currently to help reduce a global supply overhang, JPMorgan said in a note on Tuesday.
The Organization of the Petroleum Exporting Countries (OPEC)and allies including Russia, a group known as OPEC+, meet in Vienna on Thursday and Friday.
OPEC’s de facto leader Saudi Arabia will agree to lower its quota to 10 million bpd from 10.3 million bpd and will press other producers, particularly Iraq, Nigeria and Russia, to improve their compliance with previous commitments, JPMorgan analyst Christyan Malek wrote in the note.
Saudi Arabia requires the deeper cuts in order to support oil prices and maintain them within a “comfort level” range of $60-$70 per barrel which is closer to the kingdom’s fiscal budget break-even level, Malek told Reuters.
Brent futures were trading at $60.53 per barrel at 1310 GMT, down 39 cents.
Saudi Arabia, which recently named Prince Abdulaziz bin Salman as its new oil minister, “is keen to lead by example through increased contribution in order to reflect that it is an imperative to reduce the overhang into 2020,” Malek said. (Reporting by Ron Bousso; editing by Jason Neely)