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OPEC+ will likely agree on Sunday to prolong its deep oil output cuts into 2024 and possibly 2025, two OPEC+ sources said as the group seeks to shore up the market amid tepid global demand growth, high interest rates and rising rival U.S. production.
Oil prices trade near $80 per barrel, below what many OPEC+ members need to balance their budget. Worries over slow demand growth in top oil importer China have weighed on prices and oil market analysts expect OPEC+ to extend cuts to balance supply.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, has made a series of deep output cuts since late 2022.
OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand.
The cuts include 3.66 million bpd by OPEC+ members valid through to the end of 2024, and 2.2 million bpd of voluntary cuts by some members which expire at the end of June.
The deal on Sunday could include extending some or all of the cuts of 3.66 million bpd into 2025 and some or all of the voluntary cuts of 2.2 million bpd into the third or fourth quarter of 2024, the two sources said.
The countries which have made voluntary cuts that are deeper than those agreed with the wider group are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.
The group will have a series of online and in person meetings on Sunday, which began at around 0930 GMT with a meeting of OPEC ministers only.
Several key ministers - mainly from countries which have made voluntary cuts - flew to Saudi Arabia's capital Riyadh, OPEC+ sources said. Other ministers will join online.
(Reporting by OPEC Newsroom; Writing by Dmitry Zhdannikov; Editing by Hugh Lawson and Emelia Sithole-Matarise)