By May 11, 2017 Read More →

Turkmenistan likely to join OPEC supply cut pact: Reuters

OPEC supply cut

Turkmenistan may join the OPEC supply cut agreement, but the addition of the Central Asian country will minimally affect the output reduction. Turkmenistan government photo.

OPEC supply cut pact expected to be extended to end of 2017, possibly Q1 2018

The Central Asian country of Turkmenistan is expected to join a number of countries participating in the OPEC supply cut agreement, according to a report by Reuters.

Turkmenistan is a small producer, pumping about 250,000 barrels per day (b/d) from onshore and offshore wells, but OPEC says the move could potentially increase the output reduction slightly.

“There could be more cuts if there are other non-OPEC countries that will join the agreement,” an OPEC source told Reuters, adding that Turkmenistan was expected to do so.

A Turkmenistan government official declined to comment.

Most OPEC and some non-cartel countries agreed to reduce production by a total of 1.8 million b/d during the first six months of 2017.  Participants are now considering extending the agreement to the end of 2017 and perhaps into the first quarter of 2018.

The deal initially led to an increase in oil prices, but prices have since stalled due to a stubborn global oversupply of crude.

On May 25, OPEC will meet in Vienna to discuss policy and the supply cut deal.

“Egypt and Turkmenistan are expected to attend the conference for the first time,” said a Reuters source who declined to be identified.

Egypt will attend the meeting as an observer, but will not be reducing its supply, according to the Petroleum Minister Tarek El Molla.  “We are short on products and we do not export crude,” he said.

According to Reuters, Egypt’s oil consumption outpaces its production, estimated to be 700,000 b/d.

 

 

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