Riyadh and Moscow ready to prolong cuts in crude oil production

Russian Energy Minister agrees with partners' efforts to "rebalance the market". He adds that the initiative is "effective". The Saudi counterpart "confident" that the agreement could be "extended" for the second half of the year. Opec's decisions are expected at the next meeting scheduled for May 25th.

Riyadh (AsiaNews / Agencies) - Saudi Arabia and Russia, two of the world's leading oil industry leaders, yesterday reached a major deal on extending crude oil production ahead of the Opec summit scheduled for the end of the month. Russian Energy Minister Alexander Novak points out that Moscow "is in solidarity" with the "efforts of our partners" in an effort to "rebalance the market" and considers that the "joint initiative" aimed at "stabilizing" the world's crude oil market "is effective".

"We are discussing the various options," he adds, "and we believe that an extension for a longer period will help accelerate the return of more favorable conditions to markets."

Speaking at a meeting in Kuala Lumpur, Malaysia's capital, Saudi Energy Minister Khalid Al-Falib says he was "confident enough" that the agreement can be "extended" throughout the second half of the year and "possibly even beyond ". He adds that the group of producer countries is "determined" in doing everything possible to "reach the goal" to bring the levels back to "the five-year average."

Last November, the Opec oil exporting cartel (Opec) decided to cut crude production of 1.2 million barrels a day in the next six months to boost the price, in downfall since 2014. The measure should have been in force for six months from January.

The move was followed, at least in part, by nations that do not belong to OPEC and are led by Russia. It remains to be seen whether the cartel will decide to extend the measure for another six months in the context of the next summit to be held on 25 May.

Last week, oil prices fell below $ 50 a barrel. The price was affected by global concerns about the effectiveness of cuts as a way of reducing inventory levels. On a worldwide scale, demand and supply of crude oil began to re-emerge, with the decisive contribution of Russia and Opec. However, according to analysts in the second half of the year there is a sharp decline in inventories.

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• Asia
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• Oil
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• Production Decrease