Saudi Arabian Energy Minister Khalid Al-Falih said that OPEC was close to making an agreement which would extend its existing deal to cut oil production past June, when the deal expires.
"On the OPEC side, a rollover is almost in the bag," Al-Falih said at an economic forum in Russia, according to Zawya. "The question is to calibrate with non-OPEC. I don't think there will be a need to deepen the cut."
In December 2018, OPEC and its non-OPEC allies, known as OPEC+, agreed to cut production by 1.2mn barrels per day, with the majority of the cuts to be shouldered by Saudi Arabia (from OPEC) and Russia (non-OPEC). In April 2019, OPEC hit 168% compliance with the agreed-upon cuts.
However, compliance was slow to start, and uneven. In his address to the Joint Ministerial Monitoring Committee, which met in Jeddah in May, he noted that collective success should not mask individual underperformance.
"I'm hoping it will be an easy decision and that we'll roll over, but if it's not, we will be flexible in terms of our position in the kingdom," he said.
Although production cuts have helped boost the oil price, the market remains relatively unstable due to larger shifts as well as trade and diplomatic issues.
"I think demand is rather healthy," Al-Falih said. "I think sentiment is shaky because of trade issues. Physical demand is very good. We're not seeing any decline. I don't think there will be a trade war."