OPEC Signals Oil Output Cut Extension

OPEC Signals Oil Output Cut Extension

Saudi Arabia’s Oil Minister, Khalid al-Falih, announced on the 8th of May that oil producers would “do whatever it takes” to re-balance the market and that he expected a global deal on cutting crude output to be extended to the end of 2017 or possibly longer, Times of Oman reported.

Falih said that recent price falls had been caused by seasonal low demand and refinery maintenance, as well as by non-OPEC production growth, especially in the United States.

“I believe the worst is now behind us with multiple leading indicators showing that supply-demand balances are in deficit and the market is moving towards re-balancing,” the minister told an audience in Kuala Lumpur, according to Zawya.

US oil production has gained more than 10% since mid-2016 to 9.3mb/d, close to the levels of top producers Russia and Saudi Arabia. Despite this, Falih said markets had improved from last year’s lows, when crude prices fell below $30 per barrel.

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