Kuwait oil minister: if extended, output cuts might be less deep

Andrew Cummings
April 20, 2017

Saudi support is essential for the 13-member Organization of the Petroleum Exporting Countries to renew its agreement at its next meeting, in Vienna on May 25.

Oil prices fell by nearly 4% in the USA session on Wednesday (http://www.marketwatch.com/story/oil-steadies-as-investors-await-eia-inventory-report-2017-04-19), marking the steepest drop since March 8.

Inventories in the OECD - which consumes about half global supply - fell only slightly in February and remained 330 million barrels above the five-year average, bigger than the surplus of 286 million at the end of December, IEA data show.

"The market has already taken the output cut plan seriously. This is the main indicator for the success of the initiative", Falih said. Consensus is growing among producer states that the agreement on supply uts should be extended, though no agreement yet exists, Saudi Energy Minister Khalid al-Falih said on the sidelines of a conference in the United Arab Emirates. "There is an initial agreement that we might be obligated to extend to get to our target".

OPEC and several other producers including Russian Federation agreed in December to pump less oil in a collective effort to counter an oversupply weighing on prices.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017 for six months, extendable for another six months.

"Either way, we won't be see a major upside in prices no matter what they decide", said Ziebell from the National Australia Bank.

Natural gas for May slipped 0.1% to $3.18 per million British thermal units.

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