Negotiations are intensifying both within the OPEC and outside it to whether to extend the current oil production deal or not. The current deal involves 11 OPEC members and 10 non-OPEC countries including Russia. Saudi Arabia led OPEC decided to cut production by 1.2 million barrels per day and the Russian-led non-OPEC agreed to reduce production by 0.578 million barrels per day. While OPEC as a group remains in full compliance with the agreed deal, many within the OPEC are yet to reach the stipulated level of production. Non-OPEC cuts have reached 65 percent of the stipulated target.

With the next OPEC meeting looming in May, delegates from the participating countries have already started the discussion of an extension to the deal, which will expire in June if not extended. According to a Reuters report based on an unnamed delegate, the deal needs to be extended and should involve non-OPEC countries. The delegate also said that hard negotiations are already on the way and it is too early to tell whether everyone will be on board or not.  OPEC members will meet in Vienna headquarter on May 25th.

Another anonymous source suggested that the defacto OPEC leader Saudi Arabia is not happy with the return of shale oil and the kingdom’s part in that play, which helped to stabilize the oil market. The report of the possibility of an extension has given the oil price a lift but it is still depressed below $50 per barrel (WTI benchmark). WTI is currently trading at $49 per barrel and Brent at $2.8 per barrel premium.