LINED UP: An employee stands in front of oil barrels at Royal Dutch Shell's lubricants-blending plant in the town of Torzhok, Russia. Picture: REUTERS
LINED UP: An employee stands in front of oil barrels at Royal Dutch Shell's lubricants-blending plant in the town of Torzhok, Russia. Picture: REUTERS

Vienna — An Opec panel reviewing scenarios for next week’s policy-setting meeting is looking at the option of deepening and extending an Opec-led deal to reduce oil output, Opec sources said on Friday.

The oil cartel’s national representatives — officials representing the 13 member countries — plus officials from Opec’s Vienna secretariat met on Wednesday and Thursday to discuss the market.

The meeting of the economic commission board was scheduled to finish on Thursday but would conclude later on Friday, two Opec sources said.

"We have not agreed on final scenarios," said one of the sources.

A second source said a deeper cut in output was an option depending on estimated growth in supply from non-Opec producers and US shale oil.

Opec kingpin Saudi Arabia and nonmember Russia, the world’s top two oil producers, have agreed on the need to keep the current cut in place until March 2018.

The meeting precedes a policy-setting gathering of Opec and non-Opec oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output.

Opec, Russia and other producers originally agreed to cut production by 1.8-million barrels a day for six months from January 1 to support the market.

Oil prices, trading at around $53 a barrel, have gained support from reduced output but high inventories and rising supply from producers not participating in the accord have limited the rally, pressing the case for extending the curbs.

A technical meeting on Friday of Opec and non-Opec countries participating in the supply cut was not expected to result in any decision.

"Today’s meeting is just informative, nothing major," an Opec source said.

Brent crude was up 63c at $53.14 a barrel at 8.13am GMT, after climbing to $53.20, its highest since April 21.

US benchmark crude was up 61c at $49.96 a barrel.

Reuters

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