Algeria proposes bringing forward Opec meeting

Opec presidency holder Algeria has submitted a proposal to bring forward a video conference to discuss the Opec+ alliance's production strategy to 4 June, according to two Opec delegates.

Opec ministers had been due to convene on 9 June, followed by a meeting with their non-Opec partners on 10 June. Ministers are expected to respond to Algeria's proposal over the next two days.

It is unclear what the suggested rescheduling would mean for meetings of the Opec+ group's Joint Technical Committee (JTC) and Joint Ministerial Monitoring Committee (JMMC), which had been pencilled in for 5 and 8 June, respectively. One Opec delegate flagged the possibility of postponing the JMMC to the second half of June, citing the need to have available latest production data from secondary sources.

The JTC studies market conditions and advises on output policy, while the JMMC tracks the compliance of Opec+ member countries with their production quotas. The results of those meetings typically inform the agenda of the subsequent ministerial meetings.

The June conference will be the first since Opec+ members struck a new, two-year output restraint agreement, which took effect on 1 May.

The first phase of the deal calls for the removal of 9.7mn b/d of crude from the market in May-June, moderating to 7.7mn b/d across the second half of the year, largely from an October 2018 baseline.

Several Opec+ delegates have suggested that the group should consider extending the higher 9.7mn b/d cut beyond June, given depressed global demand and high OECD inventory levels in the wake of the Covid-19 pandemic.

In the past, Mideast Gulf producers have delayed issuing their official formula prices and term allocations until after the Opec+ meetings have taken place. A change to the date of the June conference could help speed along Mideast Gulf allocations. Saudi Aramco, the state-controlled marketer of Opec de facto leader Saudi Arabia, is expected to release its official July prices around 5 June.

By Ruxandra Iordache and Nader Itayim