REFILE-UPDATE 6-OPEC reaches consensus to extend oil cuts in Q1 if allies agree

(Adds dropped word in paragraph 4)
* OPEC+ officials failed to agree in Sunday's informal talks
* New coronavirus wave prompted rethink on output policy
* Saudi wants extension of existing production cuts
* Russia backs gradual output increase from January

By Rania El Gamal, Ahmad Ghaddar and Olesya Astakhova
DUBAI/LONDON/MOSCOW, Nov 30 (Reuters) - OPEC members reached
a broad consensus on the need to extend existing oil production
cuts for three months from January if their allies in the wider
OPEC+ group also support such a move, ministers and delegates
said on Monday.
Algerian Energy Minister Abdelmadjid Attar, holder of the
Organization of the Petroleum Exporting Countries' rotating
presidency, said there was "consensus at the OPEC level."
He spoke before OPEC ministers began their talks on a
policy that would help producers cope with weak demand in 2021
due to the coronavirus crisis.
His Iranian counterpart, Bijan Zanganeh, made similar
remarks after the meeting finished, but said Tuesday's meeting
of OPEC+, which includes Russia and other allies, would not be
easy.
"I think within OPEC there was consensus," Zanganeh said,
the Iranian oil ministry's news agency SHANA reported.
"Tomorrow's meeting will be difficult and require negotiations
and patience."
OPEC delegations reconvene for further talks on Tuesday, the
group said in a statement. OPEC+ was scheduled to hold its
meeting on Tuesday at 1300 GMT.
OPEC+ had been due to ease existing production cuts by 2
million barrels per day (bpd) from January. But, with demand
still under pressure amid the coronavirus pandemic, OPEC+ has
been considering extending existing cuts of 7.7 million bpd,
about 8% of global demand, into the first months of 2021, a
position backed by Saudi Arabia, sources said.
After consultations on Sunday failed to reach agreement,
sources said the group was also considering increasing output
gradually from January, a position Russia backs.
"OPEC will probably agree to extend the current production
ceiling for the first quarter of 2021, if the non-OPEC countries
agree with it in (Tuesday's) meeting," an OPEC source said.
Kremlin spokesman Dmitry Peskov said differences between
Russia and OPEC were not as severe as in early 2020, when
disagreements led to a collapse in talks and a surge in output.
But Peskov said Russian President Vladimir Putin had no
plans to call Saudi Arabia's leadership before the OPEC+
meeting, a move that in the past has helped smooth over any
dispute.
OPEC+ has to strike a delicate balance of pushing up prices
enough to help their budgets but not so much that rival U.S.
output surges. U.S. shale production tends to climb as prices
rise above $50 a barrel. Adding to the challenge within OPEC+,
Moscow's finances can tolerate lower oil prices than Riyadh's.
Oil prices LCOc1 , which were down nearly 1.5% at around
$47.05 a barrel by 1825 GMT, could fall as much as 10% if OPEC
failed to roll over cuts, Deutsche Bank said in a note. O/R
Oil had a bull run last week triggered by hopes for a
COVID-19 virus vaccine and expectations of a rollover in OPEC+
cuts.

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OPEC+ Scenarios and Impact on Oil Inventories https://tmsnrt.rs/3pCSOLa
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(Additional reporting and writing by Alex Lawler and Bozorgmehr
Sharafedin, Writing by Dmitry Zdhannikov; Editing by Edmund
Blair and Marguerita Choy)