OPEC+ likely to roll back oil cuts in August, as market continues to recover: delegates

London — OPEC and its allies have not discussed extending their record 9.7 million b/d production cut accord beyond July, according to three delegates, signalling that the coalition is content to let the curbs ease down to 7.7 million b/d starting in August, as planned.

The OPEC+ coalition is buoyed by the pickup in global economic activity from the depths of the COVID-19 crisis, one delegate said, asking not to be named. But members remain vigilant in keeping an eye on the oil market, he added.

The Joint Ministerial Monitoring Committee, co-chaired by Saudi Arabia and Russia, is scheduled to meet July 15 to assess market conditions and potentially make recommendations on changes to August production quotas if needed.

S&P Global Platts assessed Dated Brent at $41.83/b on June 30, up more than threefold from the 21-year low it hit on April 21 of $13.24/b.

"There's a sign of recovery," the delegate said. "We haven't seen significant shutdowns that are returning."

Under the deal, the cuts will remain at 7.7 million b/d through the end of the year, and then roll back to 5.8 million b/d from January 2021 through April 2022.

Current discussions were more focused on ensuring full compliance with the cuts, including the members that overproduced in May and June and are obligated to compensate with extra cuts in July, August and September, such as Iraq, Nigeria, Angola and Kazakhstan, the delegates said.

However, sources have indicated friction with Angola over its excess production in May.

Saudi Crown Prince Mohammed bin Salman called Nigerian President Muhammadu Buhari on June 30 to discuss the OPEC+ deal, the official Saudi Press Agency reported.

The 23 members of the OPEC+ alliance achieved 85% of its cuts in May, according to S&P Global Platts estimates.

"100% compliance is what the market wants, and that is what will bring stability," one delegate said.