JMMC says Opec+ to delay cuts decisions to June: Update

Adds detail on the Baku meeting throughout

A planned Opec meeting in April looks likely to be cancelled because "market fundamentals are unlikely to materially change in the next two months," the Joint Ministerial Monitoring Committee (JMMC) that oversees compliance with the output cuts deal said.

Although the JMMC does not have the authority to call the meeting off, and the April event is still listed on the Opec website, Saudi Arabia's oil minister Khalid al-Falih said: "We have enough in the room today to give me confidence to say that most likely, the meeting will be cancelled."

"On balance, we felt that a meeting in April would, perhaps, be unnecessary," al-Falih said. Al-Falih said that it was too early to take a decision on production for the second half of the year, because OECD inventories are still significantly above "what we consider to be normal."

Another JMMC will take place in Jeddah, Saudi Arabia, in May, ahead of Opec's ministerial conference on 25 June. That will be immediately followed by a full meeting with non-Opec participants to co-ordinate a collective agreement on future production. The existing arrangement, under which 1.2mn b/d will be removed from the market, will expire at the end of June.

The JMMC today said the market is beset by "critical uncertainties". Several countries argued the outlook is being distorted by US ambiguity over whether it will renew waivers to allow the purchase of Iranian crude. These expire in early May. Russian energy minister Alexander Novak said yesterday that uncertainty caused by US sanctions on Iran and Venezuela could make it exceedingly difficult for the group to decide what action to take for the second half of the year, before May or June.

The US government will decide in early May whether to end or extend some waivers granted to buyers of Iranian crude. The decision effectively could affect up to 1mn b/d of Iranian crude supply to the market.

The JMMC said that compliance with the cuts deal reached almost 90pc in February, up from 83pc in January. Iraq, Kazakhstan, Nigeria and the UAE joined the committee; Oman, a founding member, left the group. Kazakhstan has not been meeting its commitments so far this year, nor have Iraq or Nigeria, or existing committee member Russia. The JMMC said that all countries present at the meeting had given assurances that they will exceed their cut pledges in coming months.