Oil jumps on plan to extend cuts

Vienna - Crude producers seek inventories control, market balance

Opec and its allies look set to extend oil supply cuts this week at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up the price of crude amid a weakening global economy.
Saudi Energy Minister Khalid Al Falih said the deal would most likely be extended by nine months.
"It's a rollover and it's happening," Falih, whose country is the de facto leader of Opec, told reporters on Sunday.
UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei also voiced his support for an extension - but stressed that any nation could still veto the Osaka agreement.
"Each country's voice counts and each country can veto a decision," Mazrouei stated. Al Mazrouei predicted that Opec would agree to the production cut plan amid the brighter post-G20 demand outlook.
"We in the UAE see that nine months extension would be more appropriate and we look forward to a healthier demand in the second half of the year after the good results from the G20 meeting," Mazrouei said.
Iraq's oil minister said on Monday that his government and the rest of Opec seek to control global oil inventories and restore balance to the oil market, according to a ministry statement.
Minister Thamer Ghadhban on Monday on the sidelines of an Opec meeting in Vienna met his Saudi and Russian counterparts. They discussed oil market developments and exchanged views on extending oil supply cuts, the statement said.
Brent crude futures for September delivery were up 10 cents a barrel at $64.84 at 1542GMT after earlier rallying to $66.75. The August delivery contract closed at $66.55 a barrel on Friday. US crude futures for August climbed 31 cents to $58.78 a barrel, after earlier hitting their highest in over five weeks at $60.28.
Benchmark Brent crude has climbed more than 25 per cent since the start of 2019 but prices could stall as a slowing global economy squeezes demand and US oil floods the market, a Reuters poll of analysts found.
Iranian Oil Minister Bijan Zanganeh told reporters on Monday he would support prolonging output cuts by six to nine months. Tehran has in the past objected to policies put forward by arch-rival Saudi Arabia, saying Riyadh was too close to Washington.
"I have no problem with a production cut ... It's going to be an easy meeting as my stance is very clear," Zanganeh told reporters in Vienna.
Iran's exports plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington's fresh sanctions.
Opec and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has overtaken Russia and Saudi Arabia as the world's top producer.
US shale's growth rate peaked
The US shale industry's sizzling growth rate likely peaked last year, according to a survey of major forecasters, cooled by investors demanding financial returns over increased oil output.
Around 1.3 million barrels per day (bpd) of new US shale oil production should hit the market this year, down from around 1.5 million new bpd that arrived in 2018, according to the average of recent forecasts from four energy research firms and the US government.
The United States will continue to drive global oil supplies over the next five years, adding 4 million bpd, peaking no sooner than 2025, researchers project. The U.S. Energy Information Agency estimates shale output could rise into the mid-2030s, but never again at last year's pace.