Gulf Cooperation Council countries agreed to push for an extension in a meeting on Wednesday, Oman Oil Minister Mohammed Al Rumhy said in an interview in Abu Dhabi. The GCC states are OPEC members Saudi Arabia, Kuwait, Qatar and the United Arab Emirates, in addition to Oman and Bahrain. GCC states are participating in a global six-month agreement to reduce oil output that took effect in January.
The first three months of production cuts by the Organization of Petroleum Exporting Countries and other major producers have failed to to achieve a targeted reduction in inventories below their five-year historical average, Saudi Arabia’s Khalid Al-Falih said at a conference in Abu Dhabi, the U.A.E. capital.
“Although there is a high level of commitment, we haven’t reached our goal, which is to reach the five-year average,” Al-Falih said. “There is an initial agreement that we might be obligated to extend to get to our target.” All producers participating in the output cuts haven’t yet reached a consensus on an extension of the agreement into the second half, he said.
OPEC and several other producers including Russia agreed in December to pump less oil in a collective effort to counter an oversupply weighing on prices. OPEC will decide at a meeting on May 25 whether to prolong its pledged cuts into the second half of the year, the group’s Secretary-General Mohammad Barkindo said Wednesday in Abu Dhabi. Brent crude has gained about 15 percent since OPEC decided to pare output, and the benchmark grade was 27 cents higher at $53.20 a barrel at 8:44 a.m. on Thursday in London.
OPEC members Iran and Venezuela have expressed support for an extension of production cuts, Al Rumhy said. Iran’s oil minister made a commitment to freeze output at 3.8 million barrels a day for the rest of the year on the assumption the cuts are extended beyond June, Kuwait Oil Minister Issam Almarzooq told reporters in Abu Dhabi.