Tue, May 16, 2017 - Page 10 News List

Russia and Saudi Arabia call for oil output extension

AFP, MOSCOW

The world’s biggest oil producers Russia and Saudi Arabia yesterday called for extending an output reduction deal ahead of an OPEC meeting later this month.

“To underscore the determination of oil producers to ensure market stability, predictability and sustainable development — the joint actions of the participating producers should be extended by nine months, through March 31, 2018,” the countries said in a joint statement published by the Russian Ministry of Energy.

DESIRED GOALS

The statement added that Russian Minister of Energy Alexander Novak and his Saudi counterpart, Khalid al-Falih, who met in Beijing yesterday, had “agreed to do whatever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their five-year average level.”

The ministers are to consult with other oil-producing countries with “the goal of reaching full consensus on the nine-month extension” they are seeking, the statement said.

PRICE JUMP

Oil prices jumped to their highest levels following the news.

West Texas Intermediate for delivery next month climbed as much as US$1.04 to US$48.88 a barrel before trading at US$48.82 on the New York Mercantile Exchange at 7:56am in London, while Brent for July settlement added as much as US$1.04, or 2.1 percent, to US$51.88 a barrel on the London-based ICE Futures Europe exchange.

OPEC members agreed in November last year to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to reduce the glut of oil supplies and shore up prices.

The move was partly matched by non-cartel producers led by Russia.

OPEC is to convene on Thursday next week in a meeting where its members and Russia are expected to agree to cut production.

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