Russia, Saudi Arabia to Discuss Markets, Production-Cut Deal

Russia, Saudi Arabia to Discuss Markets, Production-Cut Deal

Russian and Saudi ministers will meet early next month to discuss global oil markets and the future of the production-cut agreement, the Russian Energy Minister, Alexander Novak, said, according to Reuters.

“This does not mean that we will make any decisions,” Novak noted.

The two countries are both parties to the production-cut agreement implemented in January by OPEC and a group of non-OPEC oil producers. Under the terms of the agreement, the signatories agreed to cut combined production of crude oil by 1.8 million barrels per day (b/d) in order to draw down global oil supplies. The agreement was later extended until March 2018.

OPEC is expected to discuss a possible extension of the agreement when it meets next month. A further extension of the agreement is likely, OPEC sources told Reuters.

“The market has improved a lot but has still some way to go,” the Saudi Arabian Oil Minister, Khalid El Falih, noted earlier this month, Reuters reported at the time.

Prices have only risen marginally since the implementation of the agreement. The price of Brent crude has increased from $55.05 per barrel at the beginning of the year to $57.49 per barrel on Monday, an increase of almost 4.5%, according to the US Energy Information Administration.

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