Oil extended gains as Saudi Arabia announced that all producers participating in output cuts agree on prolonging the deal through the first quarter of 2018.
On the New York Stock Exchange NYMEX (New York Mercantile Exchange) cost of the US Light crude oil increased $0.41 to stand at $50.74.
Price of the Brent crude oil at the London ICE (InterContinental Exchange Futures) rose $0.42 to trade at $54.03.
An extension into next year will help producers reach their goal of trimming global stockpiles to a five-year average, Saudi Arabia’s Energy Minister Khalid Al-Falih said Sunday.
Iraq’s Oil Minister Jabbar Al-Luaibi said almost all countries participating in the cut had agreed to extend it, though there was no consensus yet on how long the extension should be. “Some ministers say nine months, some ministers think six months,” al-Luaibi said Sunday in an interview in Jordan. Iraq is OPEC’s second-largest producer; Saudi Arabia, the biggest.
Oil has climbed as OPEC’s de-facto leader Saudi Arabia and non-OPEC member Russia backed a nine-month extension to the output-cut deal reached in late 2016.
OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
The Cartel will meet in Vienna on May 25.