(MENAFN- Gulf Times) A joint committee of oil producers inside and outside Opec has recommended that a deal curbing output be extended, Russia's energy minister said ahead of a key meeting in Vienna today.
'The (oil) market has not yet achieved complete stability and more action is needed beyond April 1. Everyone (in the committee) recommended an extension, Alexander Novak said in the Austrian capital. 'All the details will be discussed tomorrow (Thursday)... But I am sure that the recommendations of the committee will be followed and that the result will be positive, Novak told reporters.
The deal among 24 oil producing nations reducing output by 1.8mn bpd, aimed at reducing a global glut and lifting the price of oil, was struck a year ago and expires on March 31.
It was unclear however whether the committee, which includes big hitters Russia and Saudi Arabia, recommended an extension of six months, until September 30, 2018, or by nine months until the end of 2018.
The agreement was originally stuck a year ago after oil prices plummeted to a 13-year low of under $30 a barrel in early 2016, blowing a hole in producer nations' finances.
Helped by improving economic conditions boosting demand, the accord has borne fruit, boosting oil prices to near two-year highs and reducing oil inventories to more normal levels.
Brent Crude has crept up to towards $65 per barrel, while fellow benchmark West Texas Intermediate has been heading for $60. The danger however is that the higher the price, the more this will help shale oil producers in the US, which are outside the agreement, ramp up production and take market share.
Oil prices slipped to session lows yesterday in a volatile early session buffeted by conflicting statements from oil ministers a day ahead of Opec's meeting in Vienna, as members debate the path for an extension of the group's supply-cut agreement.
The market was less affected by a larger-than-expected 3.4mn-barrel drawdown in US crude inventories, although gasoline and distillate stocks rising more than anticipated weighed.
'The rise in refined product inventories more than offsets the crude oil inventory drop, and there was a notable, if not spectacular, drop in implied gasoline demand on the week, said John Kilduff, partner at energy hedge fund Again Capital in New York.
Brent crude futures fell 49 cents to $63.12 a barrel as of 11.31am EST (1631 GMT), while US crude fell 50 cents to $57.48 a barrel. Page 2
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