Russia, Saudi call for oil output deal extension

20 May, 2017, 11:06 | Author: Leticia Walters

OPEC and some non-OPEC producers agreed in December to cut output by 1.8 million barrels per day for six months to help stabilize oil prices.

Oil prices surged 2 percent on Monday after Saudi and Russian energy ministers said they agreed producers should roll over a deal to take 1.8 million barrels a day off the market.

The bank said that "these combined volumes could largely offset the benefit of the extended cuts". They also impact U.S. oil and gas exploration and production companies like ConocoPhillips (COP), Contango Oil & Gas (MCF), Stone Energy (SGY), and Denbury Resources (DNR). "We discussed this topic and we support this kind of proposal".

Russian Energy Minister Alexander Novak said the proposed extension of output cuts aimed to bring global commercial oil inventories down to the five-year average and stabilize the market.USA bank Goldman Sachs said the deal would likely extend the oil price rebound "although the rally so far.has remained modest compared to the move that occurred last year when the OPEC cuts were first announced".

Still, global oil supply and demand almost realigned in the first quarter after a almost three-year oversupply, and the oil stuck in storage tanks around the world shrank by 1 million barrels a day in March, the IEA said. USA bank Goldman Sachs said the deal "will likely further extend the oil price rebound... although the rally so far... has remained modest compared to the move that occurred a year ago when the OPEC cuts were first announced".

Russian President Vladimir Putin said on Monday that extending oil output cuts for further nine months would ensure stable oil prices.

HONG KONG (AP) - A strong U.S.jobs report shored up markets on Friday, though energy shares remained under pressure after the price of oil touched its lowest level in nearly six months.

Brent crude, the global benchmark, had risen $1.50 to $52.34 a barrel by 1152 GMT and traded intraday at $52.52, the highest since April 24.

Since then Opec ministers have issued a flurry of supportive statements to assure the market that a deal is likely to come from the May 25 meeting.

USA cyber stocks jumped, but the largest advancing sector on Wall Street was energy as shares tracked oil prices higher.

"There has been a marked reduction to the inventories, but we're not where we want to be in reaching the five-year average", Falih told a briefing in Beijing alongside Novak. Saudi Arabian production in April average 9.97 million barrels per day, nearly 1 percent below its quota under the multilateral deal.

Current U.S. production is at 9.3 million bpd, up more than 10 percent since its mid-2016 trough.

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