Riyadh — Crude oil prices surged nearly 2.5% to their highest level in two weeks after the world’s two biggest producers agreed in principle to extend a deal on output restraint through March of next year.
“To underscore the determination of oil producers to ensure market stability, predictability and sustainable development — the joint actions of the participating producers should be extended by 9 months, through March 31, 2018,” Saudi Arabia and Russia said in a joint statement published Monday by Russia’s energy ministry.
The statement added that Russian energy minister Alexander Novak and his Saudi counterpart Khalid Al-Falih, who met in Beijing on Monday, had “agreed to do whatever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their 5-year average level.”
The ministers will consult with other oil-producing countries with “the goal of reaching full consensus on the 9-month extension” they are seeking, the statement said.
The international benchmark for crude oil was up $1.25, of 2.5 percent on the day, at $52.10 a barrel.
The Saudi-Russian declaration said that the existing deal had had “a significant positive influence” on the market, noting that global inventories of crude had fallen faster than their historical averages in the last five months
OPEC members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to reduce the glut of oil supplies and shore up prices.
The move was partly matched by non-OPEC producers led by Russia. — Agencies