Gulf Delegate: OPEC Unlikely To Cut In June Without Non-OPEC As Oil Rebound

Reuters

RIYADH, May 6 (Reuters) - The jump in oil prices has been supported by stronger-than-expected demand growth and a slowdown in crude supply, and is likely to continue into the second half of this year, a senior Gulf OPEC delegate said on Wednesday.

Some OPEC members are trying to bring major non-OPEC producers such as Russia on board in cutting supplies, as the Organization of the Petroleum Exporting Countries is unlikely to curb output alone when it meets on June 5 without the participation of non-OPEC countries, the delegate said.

A rally driven by Middle East tensions and signs the supply glut could ease pushed Brent crude to a 2015 high of $69.63 a barrel on Wednesday, up from $45 in January. Oil prices more than halved last year after reaching $115 a barrel in June.

"The market is firming up and this will continue. Demand is much, much stronger than anticipated," the delegate told Reuters.

"There are clear signs and information about growth in demand and slower supply from the high cost and marginal producers."

The comments indicate that core Gulf OPEC members are not wavering in their strategy to focus on market share rather than cutting output alone, suggesting big policy changes are unlikely at the June meeting unless non-OPEC producers change their stance.

Last year's oil-price collapse accelerated after OPEC refused to prop up prices. That shift in policy was driven by top exporter Saudi Arabia and supported by Gulf states.


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