Saudi Gazette report

RIYADH — On the eve of a high-stakes meeting of major oil producing countries on output policy, Saudi Arabia's Energy Minister Prince Abdulaziz Bin Salman said the conditions are conducive for a breakthrough in negotiations.

Confirming the meeting, which will be held through video conferencing on Saturday (June 6), the Saudi minister said: “Coordination is underway to hold #OPEC and #OPEC+ meetings tomorrow afternoon, conditions now warrant “hopefully successful” meetings.”

Earlier in the day, the Russian energy ministry also made a confirmation about the meeting.

Meanwhile just before the high-level meeting, Russia’s Energy Minister Alexander Novak predicted a shortage in the oil market next month, oilprice.com reported on Thursday.

Novak said that the global oil markets could see a shortfall between three and five million barrels per day in July, depending on the outcome of the OPEC meeting.

The meeting that will help shape the future of the oil market over the next few months is proving difficult, however, even though it would appear that Saudi Arabia and Russia have reached an agreement in principle to extend the current level of cuts through the end of July.

The cuts are currently set to ease starting in July.

But negotiations among the cartel members are complex, with Iraq, Angola, Nigeria, and Kazakhstan overproducing.

OPEC+ quotas call for total cuts of 9.7 million bpd. Oil demand, however, is still off by 21 million bpd as of May, according to Novak. But that’s up from 25-28 million bpd off in April.

Novak added that the filling up of oil storage has slowed, and that thanks to the current production cuts and the improving demand figures so far, the market should achieve balance in June, before slipping into a deficit in July.

Based on May’s production, OPEC has another 1 million barrels to cut to get into full compliance with the current deal.