"The ruckus reflects pushback by producers facing stronger pressure than in the past to comply and contribute real, voluntary cuts", said Bob McNally, president of Rapidan Energy Group and a former oil official at the White House under then-US president George W. Bush.
OPEC met on Thursday in Vienna, deliberating policy for more than five hours. Combined with geopolitical instability in Venezuela and Libya, tensions in the Middle East and U.S. sanctions on Iran, the production cuts have reduced the supply of oil and been positive for the price of the commodity.
"The outlook will be bleak if OPEC+ fails to agree on additional cuts", said Rystad Energy adding the market will face an oversupply to the tune of 0.8 million bpd in the first half of 2020 without fresh cuts. They began a closed-door meeting at around 1130 GMT to thrash out how the additional cuts will be distributed.
Furthermore, even if these nations cut production, more and more non-OPEC countries are pumping out massive amounts of oil, including the US, Brazil, Canada, Norway, and Guyana.
Washington's ongoing trade dispute with China has also clouded the economic and therefore oil demand outlook for 2020.
Brent futures were up around 1.4 per cent at $64.27 per barrel by 12:16 p.m. EDT and were on track to rise almost 3 per cent on the week.
Any price gains from the OPEC+ output cut are likely to benefit American producers not party to any supply curbing agreement.
Under their current pact, due to expire in March 2020, 11 of Opec's 14 member states have agreed to cut about 800,000 bpd of output, with Iran, Libya and Venezuela exempted from participating. "If OPEC and Russian Federation don't extend and deepen their cuts, we could see Brent Blend dip to the $40s next year for a shorter period", Tonhaugen said.
On Thursday, the state oil giant priced its IPO at the top of its price range, raising $25.6 billion and topping Alibaba's record $25 billion listing in 2014. The US benchmark gained 77 cents to US$59.20 a barrel.
"Russia's share of overall production cuts in the first quarter [of 2020] will be 300,000 barrels per day", Novak said. That might change if oil and gasoline prices rise ahead of the USA presidential election set for November 2020.
Earlier in the day, ministers reached a deal in principle to deepen their output-cuts target by 500,000 barrels a day, delegates said. Condensate is a high-value light type of crude oil extracted as a by-product of gas production.