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Bloomberg
A deal among oil-producing countries to curb production and balance an oversupplied market will achieve its objective in the first quarter of next year, Russian Energy Minister Alexander Novak said, after prices slipped on news of a build-up in US inventories.
The Organization of Petroleum Exporting Countries and other crude producers including Russia agreed on May 25 to extend the deal, which they reached last year, until the end of the first quarter. Prices slumped on the news that they would not cut any deeper and fell further on June 7 as US stockpiles unexpectedly grew. Benchmark Brent crude closed at $48.15 a barrel on Friday.
The agreement is working and crude inventories are decreasingly gradually at a global level, Novak said on Sunday in Astana, a day after meeting his Saudi counterpart Khalid Al-Falih. Demand will recover in the first quarter, reducing stockpiles, and Russia is committed to doing everything to balance the market, he said. OPEC’s biggest producer Saudi Arabia also weighed in, as Al-Falih said the market would stabilize in the next few months. There is no need for producers to cut more than they’re doing already, Al-Falih said, according to the Interfax news agency.