Kuwait backs call to extend oil output cuts

West Texas Intermediate climbed as much as 3.4 percent to $49.45 a barrel on the New York Mercantile Exchange, while global benchmark Brent increased as much as 3.3 percent to $52.52 on ICE Futures Europe.

In a joint statement Opec's de facto leader Saudi Arabia and Russian Federation, the world's second largest oil producer, said they had come to the conclusion that the agreement needs to be extended.

Current Oil Minister Bijan Zanganeh, speaking on 6 May, said he believed producers were likely to extend the Opec-led deal although he did not give a timeframe, and added $55 was a suitable price for oil.

OPEC member Iraq, whose production is growing fast, has said it would support renewing the deal only for six months. Sources have told Reuters that Turkmenistan is one of the new countries which may join the global deal. That would be longer than the optional six-month extension first agreed. They recommended that the next round of reductions should be on the same terms as the first deal, when producer nations agreed to cut nearly 1.8m barrels a day for the first six months of 2017.

Amid the cutbacks, production in the USA, which isn't part of the agreement, has risen to the highest level since August 2015.

As of May 1, Russian Federation moved beyond its commitments as it reduced oil production by 300,790 barrels per day versus October 2016, according to the Energy Ministry. The cuts were agreed by OPEC in November of last year and represented the first agreement of its kind in eight years, in an attempt to curb the oil rout caused by excessive oversupply.

Oil producers have been trying to boost prices, as crude futures trade around $50 a barrel, less than half their level from early 2014, though above the low of below $30 in early 2015.

Global crude oil supply inched down by 140,000 barrels daily last month, to 96.17 million bpd, the International Energy Agency said in the latest edition of its Oil Market Report.

"We hope that during the next meeting of OPEC members and other states, during which the agreement will be discussed, we will be able to extend this historic initiative", the statement said.

"The market will also be looking at export cuts and not just production cuts, which is what is required to rebalance the market". Still, even if OPEC and its partners prolong their measures when they meet next week, inventories will probably remain above average through the end of the year, it said.

  • Zachary Reyes