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Opec may need more than its oil output extension

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Opec and its allies have run out of options ahead of their meeting at the end of this month, as oil prices slide.

It is almost certainly a foregone conclusion that oil ministers will extend their output deal when they meet in Vienna on May 25, with that outcome already baked into oil market expectations.

But the broader question is whether members will stay committed to a policy that, for its initial six-month period at least, has failed in its aim of hastening a rebalancing of a flooded world oil market.

Khalid Al Falih, Saudi Arabia’s energy minister, said last month in Abu Dhabi that the kingdom was on board for an extension of at least three months as long as all other parties to December’s deal agree, a policy that is backed by its close Arabian Gulf allies, Kuwait, Qatar, and the UAE, as well as Iraq, which together bear almost all the load of Opec’s pledged cuts.

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Written by Anthony McAuley for The National

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