Oil trio set to propose 1.2 mbpd extra OPEC output

Oil trio set to propose 1.2 mbpd extra OPEC output
REUTERS

MARCH 1: Leading oil producers Saudi Arabia, Venezuela and Mexico are set to propose that OPEC raise oil output by 1.2 million barrels from April, OPEC delegates said.

They said that a meeting in London on Thursday the three would put the finishing touches to an accord which would also see non-OPEC Mexico agree to raise supply by 90,000 bpd.

The aim of the producers would be to ease benchmark US light crude back below $25 a barrel. U S crude was valued on Wednesday at $30.70 a barrel.

The trio may also recommend that OPEC quickly add another 500,000 bpd of supply if the oil markets prove resilient after the impact of the initial 1.2 million bpd rise, the delegates said.

Delegates said that the oil ministers of Saudi Arabia, Venezuela and Mexico had been in close touch in recent days and that Thursday's meeting was likely to seal the accord.

It remains unclear whether the three will publicly announce details before OPEC's March 27 meeting. The additional supply would reverse about 28 per cent of the 4.316 million bpd of OPEC output curbs in place since last March, adding five per cent to the 22.976 million bpd baseline for ten OPEC producers set at that time.

That would mean Saudi Arabia increasing by about 365,000 bpd, Venezuela by 181,000 bpd and Iran by 158,000 bpd. Others in OPEC, excluding sanctions bound Iraq, would also add pro-rata at 28 per cent of their previous cuts.

Mexico in addition would reverse pro-rata at 28 per cent of its 325,000 bpd of export cuts.