The world’s biggest oil producers Russia and Saudi Arabia on Monday eyed up extending an output reduction deal ahead of an OPEC meeting later this month.
“Russia is in solidarity with the efforts of our partners to rebalance the market and considers that the joint initiative to stabilise the world oil market is currently effective,” energy minister Alexander Novak said, Russian news agencies reported.
“We are discussing different options and consider that an extension for a longer period will help to speed up the return of the markets to a healthier condition.”
At the same time Saudi Arabia’s energy minister Khalid Al-Falih also said in Kuala Lumpur that he was “rather confident the agreement will be extended into the second half of the year and possibly beyond”, Bloomberg reported.
“The producer coalition is determined to do whatever it takes to achieve our target of bringing stock levels back to the five-year average,” Al-Falih was reported as saying.
OPEC members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to shore up prices.
The move was also partly matched by non-cartel producers led by Russia and the critical question is whether OPEC will extend the deal for another six months or even beyond at its next meeting on May 25.
Oil prices dropped last week to under $50 a barrel on fresh global concerns about a supply glut as traders questioned whether the production cuts were doing enough to ease inventory levels.