OPEC+ Close to Agreeing Next Meeting Takes Place on July 1-2

(Bloomberg) -- The OPEC+ group of oil producers is close to agreeing their next meeting will be in Vienna on July 1-2, ending a dispute about when they sit down to discuss output policy for the second half of the year.

The compromise was proposed in a letter sent by OPEC’s current president, Venezuelan Oil Minister Manuel Quevedo, and members are close to agreeing on the new timetable, a delegate said, asking not to be named before a public announcement.

The oil producers group, which pumps more than half the world’s crude, has been bickering for a month about the timing of ministerial talks. Their failure to agree a date just weeks before their production cuts expire gave turbulent markets little reassurance as crude prices extend their slump.

This is the third set of dates to be considered after the original request to shift the meeting from June to July that came from Russia, which despite being an outsider has exerted a strong influence over the group since joining forces almost three years ago.

Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic spat that pitted long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis -- and the U.S. -- accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under U.S. sanctions, denied culpability.

Quevedo brokered the new dates after intensive consultations with ministers -- including Saudi Arabia’s Khalid Al-Falih, Iran’s Bijan Zanganeh and Russia’s Alexander Novak, as well as OPEC Secretary-General Mohammad Barkindo. In his letter Quevedo expressed his appreciation to all members for their ability to compromise.

Separately, an OPEC committee sees global oil inventories contracting by almost 500,000 barrels a day if the group continues restraining supply in the second half of the year, according to a delegate.

The estimate by the Economic Commission Board suggests OPEC and its partners have room to boost production from current levels and still keep the market in balance. The committee, which met in Vienna on Monday and Tuesday, compiles a market outlook that helps the ministers from OPEC nations decide on production levels.

The panel’s findings are roughly in line with those published by the OPEC secretariat last week. That report showed that demand for the cartel’s crude will average 30.455 million barrels a day in the second half of this year, or 579,000 a day above the 29.876 million a day its 14 members pumped in May.

--With assistance from Dina Khrennikova, Javier Blas, Olga Tanas and Salma El Wardany.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, Nayla Razzouk

©2019 Bloomberg L.P.