London — OPEC and its oil producer allies are "comfortable" with Brent crude prices in the range of $60-$70/b and continue to target a deal to extend their current production cuts to the end of 2019, the oil minister of OPEC member Equatorial Guinea, Gabriel Mbaga Obiang Lima, said Monday.
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Register NowBrent crude futures were trading around $62/b Monday, having recovered from briefly dipping to a four-month low below $60/b last week on concerns over the resilience of the global economy to escalating US trade disputes.
"$60-$70/b is the price that we all feel comfortable with," Obiang told S&P Global Platts in an interview in London. "It has been for almost a year like that ... that's really the right price for the producer and the consumer and we can all live with that."
Related story: OPEC dithers on a meeting date, even with a solid consensus to continue oil cuts
Noting the brief slump of the US crude benchmark WTI to below $50/b last week, Obiang said it was "a glitch" due to geopolitical concerns that has since been "readjusted."
OPEC and 10 non-OPEC partners, led by Russia, agreed in December to cut a combined 1.2 million b/d of production in the first half of 2019.
Speaking earlier Monday, Saudi Arabia energy minister Khalid al-Falih said he is "absolutely" confident OPEC and non-OPEC partners will reach an agreement to extend an oil production deal that expires this month.
All OPEC members except one have agreed to delay the group's June 25-26 meeting to the first week of July, after the G20 leaders' summit in Osaka, Japan on June 28-29, Falih said.
Asked when the next meeting will be held, Obiang said: "It is between in two weeks or in July."
"What we all want is stability, we do not want volatility. We do all believe that it is important to extend the agreement to the end of the year to be able to monitor [the oil market]," he said. "We are definitely going to have an extension, we are working on that. Not having it would be a big surprise for everybody."
Russia, by far the biggest non-OPEC producer in the pact, has suggested it is undecided over whether to back an extension of the current cut deal. Speculation over Russia's continued involvement in the deal has been fueled by Moscow's request to delay the original June 25 meeting.
Asked to comment on recent Russian lukewarm remarks on its commitment to further cuts, Obiang said: "You have to create drama ... but we all agree on the same thing."
Last week, OPEC acknowledged that it faces a challenging second half of 2019, with demand-dampening trade disputes combining with expected robust non-OPEC supply growth to hinder the producer bloc's oil market rebalancing efforts.
The International Energy Agency on Friday cut its oil demand growth forecast for 2019 for the second month in a row as "world trade growth has fallen back to its slowest pace since the financial crisis 10 years ago."
The IEA sees oil demand growth of 1.2 million b/d, a 100,000 b/d reduction from the previous estimate, given the economic slowdown.
-- Robert Perkins, robert.perkins@spglobal.com
-- Eklavya Gupte, eklavya.gupte@spglobal.com
-- Edited by James Burgess, newsdesk@spglobal.com