The agreement between Opec and other producers including Russia on a production cut to stablize prices will likely be extended for another nine months.
The existing production cuts were to be in force for the first six months of the year, but according to Saudi energy minister Khalid al-Falih there is broad agreement to prolong the deal, reported Bloomberg.
Falih spoke to media at the Saudi-US CEO Forum 2017 ahead of the arrival of the US President Donald Trump, in Riyadh.
The decision to extend up to the first quarter of 2018 will only be sealed when Opec and the other major players meet in Vienna at the end of the month, said al-Falih Bloomberg television in Riyadh on Saturday. “We think we have everybody on board,” he said.
Impact of US shale output
Meanwhile, representatives and officials from Opec and non-Opec members met in Vienna on Friday to discuss how increased shale oil production in the US, has been diluting the price impact of their production cuts. The initial rise in prices following the output cut were again impacted by shale firms deploying more rigs and raised American output to the highest since 2015.
On the other hand, al-Falih maintained that OPEC and other producers were not targeting any specific oil price. He said the oil producers are seeking the output cut extension since they have realized that the aim of bringing global inventories down to a five-year average has not been met.