UPDATE 4-OPEC panel looking at deepening, extending oil cuts - sources

Fri May 19, 2017 5:18pm GMT

(Adds panel meeting ended on Friday)

By Alex Lawler and Rania El Gamal

VIENNA May 19 (Reuters) - An OPEC panel reviewing scenarios for the oil producer group's meeting next week is looking at the option of deepening and extending a deal to reduce crude output, OPEC sources said on Friday, in an attempt to drain inventories and support prices.

Saudi Arabia and non-OPEC Russia, the world's top two oil producers, have agreed on the need to prolong the current cuts until March 2018, although Saudi Energy Minister Khalid al-Falih said extended curbs would be on the same terms.

OPEC's national representatives plus officials from its Vienna secretariat met on Wednesday and Thursday. Their panel, the Economic Commission Board (ECB), was due to conclude talks on Thursday but they finally ended on Friday, OPEC sources said.

Among the scenarios being considered by the panel were a six- or nine-month extension with a possible deeper cut, sources said.

"All options are open," one source said.

That source said a deeper cut in output was an option depending on estimated growth in supply from non-OPEC producers, mainly U.S. shale oil firms, among other scenarios.

The ECB does not set policy and its meeting precedes the gathering of OPEC and non-OPEC oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output.   Continued...

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