Saudis, Russia Favor Extending Oil Cuts Until End March 2018

Oil prices rise as Saudi and Russia agree to prolong output curbs

Oil prices rise as Saudi and Russia agree to prolong output curbs

Kuwait's Oil Minister Essam al-Marzouq said on Tuesday he supported a supply cut extension until the end of March 2018, echoing suggestions from top producers Saudi Arabia and Russian Federation on Monday, according to media reports. West Texas Intermediate (WTI) was dealing oil at 3.2 percent rise at $49.40 global Brent at $52.47 per barrel achieving the same percentage rise. "The two ministers agreed to do whatever it takes to achieve the desired goal of stabilising the market and reducing commercial oil inventories to their five-year average level".

And on Tuesday, Kuwait said it "gives its full backing and support to. extend the oil output cuts deal between OPEC and other producers until March 2018".

Prices on the market will change sharply, should the agreement be reached.

Prices are up by 2.3 percent since the announcement of the planned extension on Monday, compared with an over 15 percent jump in the two days following the announcement of the initial cut on November 30, 2016.

Gold prices are trading modestly higher in pre-U.S. session trading.

"This statement shows the commitment by Opec and major non-Opec oil producers to bringing stability to the oil market, in which is essential to have security of supply in coming years", said one of the sources.

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The rally driven by Saudi and Russian pledges to extend output cuts lost steam as investors await US crude inventory data to be released by an industry group on Tuesday and by the government on Wednesday.

It seems likely that the current deal amongst Opec nations and some other key oil producing nations will be extended.

Russia's top producer Rosneft helped prepare the deal and is ready to comply with the extension, according to Russian media. Surging U.S. production has raised concern that the Organization of Petroleum Exporting Countries and its partners are failing to reduce an oversupply.

"Given recent USA inventory declines we can expect markets to balance in 2018 if OPEC maintains the cuts". US output has risen more than 10% since the middle of previous year, and data released on Friday by oil services firm Baker Hughes showed that the number of active rigs across the country rose for the 17th week in a row.

"Iraq is with the continuation of a reduction of oil production of OPEC nations and we will push in that direction", Abadi said in a news conference broadcast on state TV.

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