VIENNA: A joint committee of oil producers inside and outside OPEC has recommended that a deal curbing output be extended, Russia’s energy minister said ahead of a key meeting in Vienna on Thursday.
“The (oil) market has not yet achieved complete stability and more action is needed beyond April 1. Everyone (in the committee) recommended an extension,” Alexander Novak said in the Austrian capital.
“All the details will be discussed tomorrow (Thursday)… But I am sure that the recommendations of the committee will be followed and that the result will be positive,” Novak told reporters.
The deal among 24 oil producing nations reducing output by 1.8 million barrels per day, aimed at reducing a global glut and lifting the price of oil, was struck a year ago and expires on March 31.
It was unclear however whether the committee, which includes big hitters Russia and Saudi Arabia, recommended an extension of six months, until September 30, 2018, or by nine months until the end of 2018.
The agreement was originally stuck a year ago after oil prices plummeted to a 13-year low of under $30 a barrel in early 2016, blowing a hole in producer nations’ finances.
Helped by improving economic conditions boosting demand, the accord has borne fruit, boosting oil prices to near two-year highs and reducing oil inventories to more normal levels.
Brent Crude has crept up to towards $65 per barrel, while fellow benchmark West Texas Intermediate has been heading for $60.
The danger, however, is that the higher the price, the more this will help shale oil producers in the United States, which are outside the agreement, ramp up production and take market share.
In addition, Russia is pressing for clarity on how and when to end the curbs, Bloomberg News reported, since its economic policy is more complex than that of OPEC members.