Russian Federation and OPEC agree to extend oil output cuts until end

Marco Green
November 24, 2017

The Organization of the Petroleum Exporting Countries, Russia and several other major producers have cut their combined output by about 1.8 million barrels per day since January to reduce bloated inventories and boost oil prices. The Kremlin had been hesitating over the need for an extension when the current deal doesn't expire until the end of March.

An understanding had also been reached that an announcement should be made at that OPEC meeting, scheduled for 30 November.

"Because of the OPEC deal we have a negative direct impact from oil production, as well as indirect effects related to low investment activity due to production limits", Oreshkin said, just a week before OPEC and its non-OPEC allies led by Russian Federation meet to decide on the extension of the deal.

West Texas Intermediate crude, the US benchmark, extended gains to the highest level since July 2015.

The negotiations are still ongoing, with oil ministers due to arrive in Vienna early next week.

The OPEC/non-OPEC production cuts hurt Russia's economic growth in October, Economy Minister Maxim Oreshkin said on Thursday in the first negative comment about the pact from a high-ranking Russian official.

Russian Federation is now said to have agreed to be part of the renewed pact, with Russian Federation leader Vladimir Putin exhibiting increased influence on the cartel to which it does not actually belong. Another option is making a clear reference to the fact that the deal could be reviewed again early next year, including the possibility of calling for another meeting.

Other reports by Click Lancashire

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