Saudi pushes for longer-lasting OPEC cuts as Aramco IPO approaches

OPEC and its allies plan to deepen oil cuts and have the deal in place so it runs at least until June 2020 as Saudi Arabia wants to deliver a positive surprise to the market before the listing of Saudi Aramco, two sources familiar with the talks said.

The deal being discussed by the Organization of the Petroleum Exporting Countries and other producers, known as OPEC+, would add at least 400,000 barrels per day (bpd) to existing cuts of 1.2 million bpd or 1.2% of global supply.

The current deal runs to March.

“They (the Saudis) want to surprise the market,” one of the sources said.

Another two sources said the latest OPEC analysis, drawn up by OPEC’s Economic Commission Board (ECB), showed a large oversupply and build up in inventories in the first half of 2020, if no additional cuts were made.