Saudi Arabia and Russia said they favor prolonging oil-output cuts by global producers through the end of the first quarter of 2018, setting a firmer timeframe for a likely extension of the curbs into next year.
Extending the curbs at already agreed-upon volumes is needed to reach the goal of reducing global inventories to the 5-year average, the energy ministers of the world’s biggest oil producers said in a joint press conference in Beijing. They will present their position ahead of a meeting between OPEC and other nations that are part of the agreement later this month in Vienna.
Russia and Saudi Arabia, the largest of the 24 nations that agreed to a deal to cut production for six months starting in January, are reaffirming their commitment to the deal amid growing doubts about its effectiveness. Surging U.S. production has raised concern that the Organization of Petroleum Exporting Countries and its partners are failing to reduce an oversupply. Oil has surrendered most of its gains since their deal late last
OPEC members agreed in November to cut 1.2 million barrels a day of oil production, and several non-members, including Russia, agreed in December to contribute a combined 600,000 barrels a day of output reductions.
As OPEC and its allies curb supply, production in the U.S., which is not part of the agreement, has risen to the highest level since August 2015 as drillers pump more from shale fields. But American crude inventories are showing some signs of shrinking, falling for the past five weeks from record levels at the end of March.
Oil jumped after Saudi Arabia’s and Russia statement. A move above 48.70 opens a way toward 50.40, the next resistance. source: xStation5