(AFP) – OPEC agreed Monday to extend by nine months daily oil output cuts aimed at supporting prices and soaking up excess supplies, following last weekend’s G20 pact between cartel kingpin Saudi Arabia and non-member Russia.
“We are very happy to announce that we have reached an agreement to extend for nine months the current production level,” said OPEC president and Venezuelan Oil Minister Manuel Quevedo at the group’s plush Vienna headquarters.
The expected news followed an official ministerial output meeting of the 14-nation Organization of the Petroleum Exporting Countries (OPEC), which pumps just under one third of the world’s oil.
Members gathered again yesterday for OPEC+ – a grouping that comprises a total of 24 crude producers including Russia, Kazakhstan, Malaysia and Mexico – which is also expected to extend its collective production limits.
The enlarged crude producing club had already decided in December to remove 1.2 million barrels per day from the market in a deal which ran through to the end of June.
The original cutbacks, sparked after oil prices tanked at the end of last year on fears of slower global growth, sent the market surging by a third in the first three months of this year.
The news nevertheless sent oil prices rallying on Monday, with sentiment boosted also by the China-US trade truce that was agreed at the G20 in Osaka.
New York crude gained 62 cents to finish at $59.09 per barrel, while Brent oil added 32 cents to $65.06.
“The G20 put a very nice backdrop to where we are today,” said Saudi Arabia’s Energy Minister Khalid al-Falih at a press conference announcing the extension.
“The global economy looks a lot better than it did a couple of years ago because of the agreement reached between President (Donald) Trump and China.”
Russian President Vladimir Putin and Saudi Arabia agreed Saturday on the sidelines of the G20 to extend the deal by between six and nine months, leaving only the time frame unclear.