An OPEC-led panel meeting to review the oil market next week will advise the wider OPEC+ group cooperating on a record supply cut, five OPEC+ sources said, meaning further talks would be needed on whether to extend the agreement further.

OPEC, Russia and allies, known as OPEC+, agreed on Saturday to keep production cuts of 9.7 million barrels per day, or 10 percent of pre-coronavirus world demand, until the end of July. The reduction has helped oil prices to more than double since April.

To step up consultations on the effectiveness of the agreement, OPEC+ also agreed that a panel called the Joint Ministerial Monitoring Committee or JMMC, will meet monthly until the end of 2020. Its first such meeting is on Thursday next week.

OPEC+ Agreed to Keep Production Cuts of 9.7 Million Barrels Per Day

Will oil price stay higher after Opec-Russia output reduction?
Opec flag outside cartel's headquarters Reuters

While this is a more frequent cycle of meetings than in the past, the JMMC's remit is still to advise OPEC+, the OPEC+ sources said. This means any decision to extend the supply reduction agreement would not be immediate. "It's an advisory committee that can make recommendations," one of the OPEC+ sources said of the JMMC's role, declining to be identified by name.

The JMMC is composed of OPEC members Algeria, Kuwait, Venezuela, Nigeria, Iraq, United Arab Emirates and Saudi Arabia, plus non-OPEC countries Russia and Kazakhstan. One of the issues the JMMC will look at is whether countries that have not delivered their share of the cutbacks could do more. OPEC+ on Saturday demanded countries such as Nigeria and Iraq compensate with extra cuts in July to September.

The day before the JMMC meets, a lower-level group called the Joint Technical Committee will gather. Both meetings, like the ministerial talks held on Saturday, will be virtual.