OPEC and non-OPEC nations poised to extend output cuts


"I think nine months is most likely", said one of the OPEC delegates and four others agreed to it.

On Thursday, Riyadh's energy minister Khalid al Falih said at the OPEC meeting that he expected the extension to ease the global crude glut sufficiently by early 2018.

The agreement hammered out in Vienna on Thursday will see the 1.8m barrel a day cuts, first agreed in November, extended to the end of the first quarter of 2018.

Maintaining lower output through the first half of this year has been cited as a major factor in supporting global crude prices at around United States dollars 50/bbl.

There had been some hopes of that a 12-month extension could be agreed or that there would be a deeper cut to output levels.

Crude oil prices have already factored in the production cut deal.

Non-Opec producers, led by Russian Federation, were scheduled to meet Opec later in the day.

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OPEC's cuts have helped push oil from $26 a barrel in early June 2016 to back above $50 a barrel this year, giving a fiscal boost to producers.

Oil's earlier price decline, which started in 2014, forced Russian Federation and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria.

A nine-month extension to the production curbs, starting in July, had been expected by analysts.

USA oil production C-OUT-T-EIA has already risen by more than 10 percent since mid-2016 to more than 9.3 million bpd as drillers take advantage of higher prices and the supply gap left by OPEC and its allies. Global crude oil inventories are above their five-year average or above 3 billion barrels.

USA oil production has already risen by more than 10 percent since mid-2016 to more than 9.3 million bpd, and OPEC's contribution to the cuts - 1.2 million bpd - could be completely eaten up by rising US production by year-end, according to RBN Energy.

On Friday, oil prices headed for a second week of gains, trading above $53 a barrel, on growing expectations that producers would agree further steps to support the market when they meet next week. Oil gained almost 30 per cent in months following the agreement in November and has since stayed around the psychological safe haven of $50, partly due to buoyancy given by expectations of renewed cuts.

More than 400 oil rigs are now working USA shale fields " an increase of more than 120 percent compared to a year ago.