Extension of Opec+ deal likely, Oman oil minister says

Demand is improving due to likely reduction of trade tensions between US, China

Opec secretary general Mohammed Barkindo last year said the group was having talks with Brazil on possible membership. AFP

The alliance between Opec and other countries including Russia, known as Opec+, will probably extend its deal, but further cuts are unlikely, Oman’s oil minister said.

"Extension [of the cuts] probably. Deeper cuts I think, probably unlikely unless things happen in the next couple of weeks," Mohammed Al Rumhy said on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference on Monday.

Opec+ has been cutting back 1.2 million barrels per day of oil since January. The pact is expected to continue until March 2020, with the group set to discuss current compliance levels as well as future cuts at their annual meeting in Vienna next month.

Mr Al Rumhy also said demand for oil is going to hold, due to the likely reduction of trade tensions between the US and China.

“I think all indications show that things are getting better than we thought six months ago. The fear of recession, downturn, crisis no one talks about that anymore. The signs of an agreement between US and China is positive,” he said.

Last month, the International Monetary Fund said the global economy is in a “synchronised slowdown” and revised its growth forecast for the year downwards for a fifth time to 3 per cent, the slowest expansion since the 2008 global financial crisis. The IMF's adjustment comes in the wake of protectionist policies and increased uncertainty related to trade and geopolitics that have strained emerging market economies.