Saudi energy minister confident of oil cut extension

This article is more than 12 months old

May 22, 2017 06:00 am

RIYADH Saudi Arabia's energy minister said that extending the current agreement on global oil supply cuts until March next year, and adding one or two small producers to the pact, should be enough to reduce oil inventories.

"We believe that continuation with the same level of cuts, plus eventually adding one or two small producers... will be more than adequate to bring the five-year balance to where they need to be by the end of the first quarter 2018," Mr Khalid al-Falih said in Riyadh.

The Organisation of Petroleum Exporting Countries (Opec) aim is to reduce global oil inventories to the industry's five-year average.

Opec, Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan 1.

Oil prices have gained support from reduced output, but high inventories and rising supply from producers not participating in the accord, such as the United States, have limited the rally, pressing the case for extending the curbs.

Saudi Arabia and non-Opec member Russia, the world's top two oil producers, have agreed on the need to prolong the current deal on cuts, which expires next month, until March 2018.