Published: Mon, April 24, 2017
Business | By Max Garcia

Kuwait says expects extension of OPEC, non-OPEC oil deal

Since a trough in May 27, 2016, US producers had added 372 oil rigs, a rise of 118 percent, Goldman Sachs said in a note.

"Russia is on board preliminarily ..."

"OPEC is like a magician waving his hands and trying to pull the rabbit out the hat, but still the rabbit isn't there", said Eugen Weinberg, Commerzbank's head of commodities research in Frankfurt.

His Kuwaiti counterpart, Essam al-Marzouq, said he expected the agreement to be extended.

The price of Brent crude has increased since OPEC and non-OPEC members agreed to reduce output, and it now trades at $53.05, after selling for as low as $27.

Investors are also monitoring whether the Organization of the Petroleum Exporting Countries will extend ongoing production cuts into the second-half of 2017, a move which could offset rising us output. The U.S. inventory data released the same day was "in line with expectations", and the slide accelerated as prices traded through their 50- and 100-day moving averages, the bank said.

While inventories held at sea and in producer countries have dropped, they remain stubbornly high in consumer regions, particularly in Asia and the United States.

Falih, whose country is the world's largest exporter, said at an energy forum in Abu Dhabi that there was a sort of "initial agreement" on the need to extend the deal after talks in Kuwait last month.

The high supplies are in part a result of other producers, who haven't agreed to cut output, increasing exports.

"We all joined - non-Opec joined with Opec - to solve a problem and in our opinion the problem is not fully solved", Mr Al Rumhy said.

Overall compliance with pledged cutbacks stood at 98 percent in March, a source said. Russian Federation pledged to cut production by 300,000 barrels daily.

One African country has expressed interest in joining, he said, without elaborating.

However, Iraq may seek to be exempt and ask to boost its own output, the leader of the nation's Shi'ite ruling coalition Ammar al-Hakim told Reuters.

Iran's crude oil exports are set to hit a 14-month low in May, suggesting the country is struggling to raise exports after clearing out stocks stored on tankers.

When asked about growing American supply, the UAE energy minister Suhail Al Mazroui said he was in favour of maintaining the current production levels, but added that this would "not be for the advantage of others".

The goal was to reduce bulging global inventories and lift oil prices.

US production, already at its highest since August 2015, looks likely to keep rising. If it continues its output cap, USA shale producers will fill the void.

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