LONDON: Opec and allies reviewing the impact of their oil cuts this weekend face a market with an unambiguous message: their work is far from done.

As producers meet in Kuwait to gauge how well they’ve implemented output cuts agreed on last year, talks will be overshadowed by the question of whether the persisting glut requires the curbs to be extended beyond the summer. With US crude stockpiles swelling to new records and prices sinking below $50 a barrel, Opec and its partners have little choice but to keep going, according to all 13 analysts surveyed by Bloomberg.

“The cost of a change of course for producers is simply too high,” said Bill Farren-Price, chief executive officer of consultants Petroleum Policy Intelligence. “They are committed to this course for now, and they will look for stocks to draw in the second half.”

Oil jumped 20 per cent in the weeks following the decision by the Organisation of Petroleum Exporting Countries and 11 allies to curtail output to end a three-year surplus. Even though Opec has delivered almost all the promised cuts, prices have since slipped on concern the curbs aren’t clearing the oversupply quickly enough, and that US shale producers are gearing up to fill any shortfall.

A five-nation committee established to monitor implementation of the accord, finalised on Dec. 10 last year, will meet in Kuwait City on March 26. Opec achieved 91 per cent of its pledged cuts last month, while Russia and other allies delivered about 44 per cent, according to data from the International Energy Agency.

Opec ministers will then meet May 25 in Vienna to decide whether to extend the deal. Analysts at banks including Bank of America Corp., Commerzbank AG and Citigroup Inc. predict they’ll prolong the cuts to the end of the year.

Saudi Arabia Energy Minister Khalid Al-Falih, while insisting it’s too early to say what will be decided, signalled in a Bloomberg Television interview on March 17 that the kingdom has grown more willing to extend the curbs. The deal will be maintained if oil stockpiles are still above their five-year average, he said, shifting from his previous position that six months of cuts would be enough.

Read more: Saudi ‘Mission Impossible’ Makes Longer Opec Cuts Inevitable

Achieving the goal of bringing inventories down to normal levels by midyear is “impossible,” according to consultants FGE. Opec and its partners would deplete less than one-third of the 300 million-barrel surplus if they cut for just six months, data from the IEA indicate.

Because of the time lag in the release of global inventory data, Opec won’t know by late May if its objective has been fulfilled, according to DNB Bank ASA oil analyst Torbjorn Kjus, who said: “May 25 could be comparable to maybe 30 meters into the 100-meter sprint at the Olympics.”

Shale Revival

The danger of stimulating growth in rival US shale-oil supplies means Opec has an incentive to wrap up its intervention sooner rather than later, according to Goldman Sachs Group Inc., which didn’t participate in Bloomberg’s survey. The cuts have already had the “unintended consequences” of keeping credit flowing to shale explorers and a revival in drilling, the bank said. The number of rigs in operation has almost doubled since May, according to Baker Hughes Inc.

“It is not in OPEC’s interest to extend its cuts beyond six months as its goal is to normalise inventories, not support prices,” Jeff Currie, Goldman’s head of commodities research, said in a March 14 report.

To achieve higher prices without sending them too high, Opec may opt for an extension that doesn’t commit them so strictly to the full cutbacks, said Jafar Altaie, chief executive officer of Manaar Energy Consulting in Abu Dhabi.

“Everything points to an extension, but one that is more tentative in holding members to their pledged cuts,” Altaie said.