An employee adjusts the Mexican flag at the meeting room before the OPEC 14th Meeting of the Joint Ministerial Monitoring Committee in Jeddah, Saudi Arabia, May 19, 2019. REUTERS/Waleed Ali
(Reuters) – Saudi Arabia and Russia are discussing two main scenarios for a meeting of OPEC and its oil-producer allies in June and both frameworks propose increased crude output from the second half of 2019, two sources familiar with the matter said.
Russia wants to ease the cuts of 1.2 million barrels per day (bpd) being carried out by the so-called OPEC+ alliance, the sources said.
The United States has also urged the Organization of the Petroleum Exporting Countries to boost supply.
The sources said OPEC’s first scenario was to eliminate over-compliance with agreed cuts, which would mean increasing output by around 0.8 million bpd.
Over-compliance arose from lower exports and output from Iran and Venezuela because of U.S. sanctions, and Saudi output reductions that have been more than called for by the OPEC+ pact.
OPEC and its allies are effectively curtailing production by close to 2 million bpd.
Another option is to ease the agreed cuts from 1.2 million bpd to 0.9 million bpd, which would mean raising output by some 0.3 million bpd, one source said.
OPEC meets on June 25-26 in Vienna.
Reporting by Reuters OPEC team; Editing by Dale Hudson