JEDDAH, Saudi Arabia—OPEC and its allies on Sunday inched closer to continuing their existing production targets through the end of the year, delegates said, as fear of a returning oil glut outweighed apprehensions around Middle East conflict.
But the group has also been looking at a handful of scenarios, some of which would involve easing production curbs without changing targets. Members of the Organization of the Petroleum Exporting Countries and its Russia-led allies are meeting in Jeddah to study production options that the group will finalize at a summit next month in Vienna.
The group agreed last December to cut output by a collective 1.2 million barrels a day. The decision led to a 33% increase in oil prices CLM19, -0.08% BRN00, +0.42% this year, but the pact ends in June. The officials gathering over the weekend are looking for a way forward for the second half of this year that won’t upset oil markets.
‘Today, we are looking at various options [for the second half of 2019] including softening the production levels. If there is a growth in demand, we are ready to consider and mitigate those parameters, a partial recovery of production.’
The group’s de facto leader Saudi Arabia, along with others such as Nigeria, Iraq and the United Arab Emirates, have expressed support for maintaining the targeted cuts of 1.2 million barrels a day.
For most ministers, the scenario “that resonates is to roll over” production targets, Saudi energy minister Khalid al-Falih told reporters after the meeting. But because of the high degree of uncertainty on demand and supply, those ministers are “prefer the ‘wait’ position,” he said.
The group is also looking at scenarios that would involve maintaining existing production targets while relaxing the way they are enforced.
An expanded version of this report appears on WSJ.com.
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