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OPEC, Allies Agree Oil Cut Extension to End of 2018

OPEC, Allies Agree Oil Cut Extension to End of 2018

Friday, 1 December, 2017 - 07:45
Saudi Arabia’s Oil Minister Khalid al-Falih sits next to OPEC Secretary General Mohammad Barkindo as he talks to journalists at the beginning of an OPEC meeting in Vienna, Austira, November 30, 2017. (Reuters/Heinz-Peter Bader)

OPEC members agreed on Thursday with non-OPEC allies, led by Russia, to reduce oil production until the end of 2018, while no agreement was reached on a specific plan to review the cut production agreement during the next meeting of the Organization In June.

Sources told Asharq Al-Awsat newspaper that Libya and Nigeria - the two countries that have been exempted from the production ceiling during the agreement that ends in March - would be included in the agreement approved on Thursday, and the two countries would commit to curb production at “the highest production levels achieved by each of them in 2017.”

The agreement with non-OPEC allies saw a slight revision to serve as a “new agreement” from January to December 2018, instead of extending the current agreement from March to the end of next year, without affecting the reduction ratios, according to the same sources.

Addressing reporters on the sidelines of a meeting of OPEC and non-OPEC allies, Saudi Energy Minister Khalid al-Falih said the Organization of the Petroleum Exporting Countries and non-OPEC allies had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market.

“All the countries participating in the agreement are satisfied with the progress we made in 2017. I think we have done a good job,” Falih told a news conference on Thursday.

“We will continue this process, because the surplus of oil stocks has not yet reached the level we are satisfied with,” he added.

Before Thursday’s meetings, Russia was pressing for a “better understanding of how producers exit the cut-off agreement, as it wanted to provide guidelines to its private and public energy companies.”

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