Cooperation vs. Competition: OPEC favours the former

OPEC and other oil exporting nations, including Russia, are in the final stage of negotiating an agreement, which may be signed in early July, aimed at cooperation in the oil production domain, Japanese Nikkei newspaper reported referring to comments of Russian Energy Minister Alexander Novak. Novak also told Nikkei that discussions with OPEC over the postponement of the next meeting to the beginning of July from the originally scheduled date of June 25-26 are almost complete.

The Organisation of Petroleum Exporting Countries, Russia and other producers agreed to cut production by 1.2 million b/d from January 1 to counter pressure on prices from US producers and weakening consumption.

OPEC+ participants planned to meet on June 25-26 or early July to decide on a possible extension of the pact.

Nikkei announced that the group is trying to give OPEC+ a permanent basis under the agreement, which will be signed at the next meeting. The publication does not specify whether Russia is ready to join production cuts.

OPEC has recently cut its forecast for consumption growth in 2019 due to prolonging nature of trade disputes and pointed out the risk of further deterioration of demand, which could be an argument in favour of extending the pact until the end of 2019. The growth in global oil demand will be 1.14 million barrels per day in the current year, 70,000 barrels per day less than previously thought, according to the OPEC monthly report.