Finance

Oil prices soar as KSA, Russia back extension of output cut

Oil prices soar as KSA, Russia back extension of output cut

Benchmark futures prices for USA crude rose 3.2% on the news to trade at $49.41 a barrel by 0800 Eastern Time, while shares in big shale oil and gas companies such as and Whiting Petroleum were also higher.

Opec countries and countries outside the cartel participating in the deal on reducing oil production have reached a full consensus on extending the deal, Al-Falih said.

Novak said the new proposal foresees the same cuts in production with extension of time frame by 9 months. Sources have told Reuters that Turkmenistan is one of the new countries which may join the global deal.

This is while global oil supply fell by 140,000 barrels per day in April as non-OPEC, and especially Canada, pumped less, according to the IEA estimates.

OPEC wants to reduce global oil inventories to their five-year average but so far has struggled to do so.

"We've come to the conclusion that the agreement needs to be extended". Oman said it fully supported the idea of a nine-month extension.

HONG KONG (AP) - A strong U.S.jobs report shored up markets on Friday, though energy shares remained under pressure after the price of oil touched its lowest level in nearly six months.

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So while Russian Federation and Saudi Arabia are doing all they can to induce a price rebound, they're also handing over valuable market share to their most dynamic competitors: American frackers.

However, last year Saudi officials agreed to the first cut in production for eight years. Nymex crude oil futures prices are challenging $50 a barrel Monday morning.

OPEC members agreed in November to cut 1.2 million barrels a day of oil production, and several non-members, including Russian Federation, agreed in December to contribute a combined 600,000 barrels a day of output reductions.

"We hope that during the next meeting of OPEC members and other states, during which the agreement will be discussed, we will be able to extend this historic initiative", the statement said. This is required to stabilize the oil market.

"Rebalancing is essentially here and, in the short term at least, is accelerating", the International Energy Agency said in its monthly report on Tuesday.

Goldman said that beyond the ongoing rise in U.S. oil production, which is up over 10% since mid-2016 to 9.3 million bpd, output will increase by OPEC members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.


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